New E-Commerce VAT rules from 1 July 2021
E-Commerce VAT rules 1 July 2021
Online sellers are now preparing for the introduction of the new E-commerce VAT rules from 1 July 2021.
These amendments will significantly change the way VAT operates for cross-border business-to-consumer (B2C) e-commerce activities in the European Union (EU).
The main changes that will enter into force from 1 July 2021 are as follows:
- Extension of the VAT Mini One Stop Shop (MOSS) to a One Stop Shop (OSS)
- The treatment of Online Marketplaces and Platforms as deemed suppliers for certain transactions
- Introduction of a new Import One Stop Shop (IOSS)
- Introduction of Special Arrangements for certain imports of goods.
As we know, OSS is an extension of the current MOSS. This simplifies the VAT obligations for businesses selling their goods and services to consumers in the EU.
The IOSS will report distance sales of goods imported from outside the EU.
EU suppliers are required to register under the OSS/IOSS regime in the Member State where they are established. Non-EU suppliers of services may register under the non-Union OSS regime in any Member State and under the Union scheme for intra-community distance sale of goods in the Member state of dispatch.
For IOSS, a non-EU established supplier must register for this indirectly through the appointment of an intermediary (unless the non-EU supplier is established in a country where the EU has a VAT mutual assistance agreement in place). If an intermediary is appointed, registration will be done in the Member State of establishment of the intermediary. If no intermediary is appointed, registration will be done in the Member State of choice.
Pre-registration for the various schemes is available from 1 April 2021.
European Union: New VAT rules for E-Commerce
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