accountants and business advisers
01 Feb 2018
The new rules include extending the existing ‘mini one-stop shop’ portal so that it applies to the distance selling of goods, and the creation of a new portal for distance sales of goods from third countries with a value below €150. For sales to consumers, VAT will be paid in the member state of the consumer, which is expected to ensure a fairer distribution of tax revenues amongst
The changes also plan to create a level playing field between businesses by making online platforms (such as Amazon and eBay) liable for the collection of VAT on the distance sales facilitated by them. They will be treated as having received and supplied the goods themselves.
At present, goods imported from outside the EU can benefit from a low value exemption, if the goods are valued at less than €22. This exemption entitles traders to import goods VAT free. The new changes have called for the removal of this exemption, to combat abuse of the system.
Moreover, start-ups and SMEs will be able to continue to apply the VAT rules used in their home country, up to a limit of yearly cross-border online sales of €10,000. This new simplification is due to come into effect on 1 January 2019.
The European Council adopted the new rules on 5 December 2017, with the aim of making it easier for online businesses to comply with their VAT obligations, providing cost savings for businesses, and increasing tax revenues for member states. The rules are also expected to allow for improved administrative cooperation between member states. The new ‘mini one-stop shop’ system will also relieve online traders of the burden of having to register for VAT in each member state in which they operate. With the exception of the simplification measure for electronic services these measures will come into force from 1 January 2021.
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