Permanent bottlenecks and complexity
Now the question remains: will the legislative changes succeed in their goal of modernizing VAT rules, making VAT obligations easier and ensuring fair competition with non-European traders?
The (short) answer: not quite.
In the first place, important bottlenecks remain. Take, for example, buyers who fall within a certain category (the "gang of four"). Do they buy goods above a threshold value (11,200 euros in Belgium)? Then they have to register for VAT and the transaction no longer falls under the distance selling rules. The problem: if such a customer "forgets" to request a VAT number, it is impossible for a vendor to know that they had that obligation. There is a chance that the wrong rules are then applied. This problem has not been removed by the new rules.
The new rules are also very complex. Broadly speaking, there are three special schemes (a non-Union scheme, a Union scheme and a scheme for distance sales of imported goods), each of which constitutes a closed system with its own modalities, each of which applies to a specific sales situation. Suppose you sell something online and there is a concurrence of distance selling of imported goods, own sales and sales by third parties on your website. You would then have to apply all kinds of different legal schemes and ensure that your business processes are adapted to them.
In addition, the new rules provide for the very long retention obligation of ten years (usually this is 7 years in Belgium today). To keep data of your sales transactions for a lot of small shipments for ten years? That can be a tough effort for a company.
Finally, it is also questionable whether the new rules will succeed in ensuring fair competition. The VAT exemption for low-value shipments will disappear, which is a step in the right direction. But the valuation problem remains. A rogue non-European entrepreneur can therefore still pass his parcels on at an incorrect value - read: too low - and thus pay less VAT than his European competitor. The success of that rule will therefore mainly depend on how efficient the controls are. It is also the case that from 2024 onwards, the aim is to involve payment service providers for this.