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Changes to the EU rules for Value Added Tax (VAT) for e-commerce transactions

09/04/2021 - 01:22
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Cross-border Value Added Tax (VAT) for e-commerce is being modernised in the EU, to make life simpler and fairer for all. The digital economy offers great potential for both business growth and additional public revenue. Therefore, new VAT rules will come into effect on the 1st of July 2021 to level the playing field for EU businesses, better tackle tax fraud, and simplify the VAT process for businesses engaged in cross-border e-commerce.

Some of the changes are:

  • Online sellers, including online marketplaces/platforms can register in one EU Member State and benefit from a reduction in red tape of up to 95% by registering with the new One Stop Shop (OSS).

  • A new EU-wide threshold for distance sales of goods within the EU - EUR 10 000.

  • A new record keeping requirements for online marketplaces/platforms

  • The VAT exemption at importation of small consignments of a value up to EUR 22 will be removed. This means all goods imported in the EU will now be subject to VAT. The Import One Stop Shop (IOSS) has been created to simplify the declaration and payment of VAT.

The aim is to simplify the existing VAT obligations and reduce the administrative burden for businesses engaged in cross-border online sales. Find out more on the dedicated website!

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