EU VAT e-commerce rules - Postponement to 1 July 2021 due to coronavirus crisis

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EY Belgium Tax
20 Jul 2020
Subject Tax alert
Categories Covid-19 Indirect Tax
Jurisdictions Belgium

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Following an earlier proposal by the European Commission, Member states' ambassadors to the EU reached a preliminary agreement on postponing by six months the application of the VAT regime applicable to online companies to 1 July 2021, instead of 1 January 2021.

The postponement should be formally adopted by the Council, without further discussion, once the text has undergone a legal and linguistic review.

The 2021 changes include:

  • Businesses operating electronic interfaces, e.g. marketplaces or platforms will, in certain circumstances, will be deemed for VAT purposes to be the supplier of the goods and will be responsible for collecting and paying the VAT due.
  • For intra-EU distance sales of goods, the national thresholds of 35 000 EUR to 100 000 EUR will be abolished. Consequently, VAT will be due in the EU Member State of arrival of the goods (subject to a general turnover threshold of 10 000 EUR).
  • Extension of the Mini One Stop Shop (MOSS) to the One Stop Shop (OSS) to all types of cross-border services to final consumers in the EU. Also, the scheme will be extended to intra-EU distance sales of goods and to certain domestic supplies facilitated by electronic interfaces.
  • The abolition of the current VAT exemption for import of goods in a small consignment of a value of up to EUR 22.
  • Creation of an Import One Stop Shop (IOSS) covering distance sales of goods imported from third countries or territories to customers in the EU up to a value of EUR 150.
  • Where the IOSS is not used, a second simplification mechanism will be available for imports. Import VAT will be collected from customers by the customs declarant (e.g. postal operator, courier firm etc.) which will make payment to the customs authorities via a monthly payment.

We remain available to further discuss any questions regarding these new developments.

If you would like to know more about the impact of these new rules on your business, please contact us for further information regarding our e-commerce scan.