EU delays 2021 e-commerce OSS VAT reforms to July 2021
The European Commission has proposed 8 May that the EU VAT e-commerce package, launching 1 January 2021, should be delayed by 6 months until 1 July 2021. The postponement is due to the disruption caused by the COVID-19 epidemic.
It is almost certain the EU Parliament and Council will adopt these proposals. Countries like Germany and the Netherlands were warning that they were behind on the reforms even before COVID-19 took hold in Europe in March.
The e-commerce package is aimed at reducing an estimated €5billion per annum in online VAT fraud, set to hit €7billion next year.
The package contains the following main measures:
- Extension of the MOSS return to e-commerce goods and a new OSS return;
- Ending distance selling threshold rules;
- Withdrawal of the €22 VAT free exemption on low-value consignments;
- Introducing the Import One Stop Shop (IOSS); and
- Making marketplaces the deemed supplier for VAT on some of the transactions they facilitate.
- Extending the OSS return to sales of services to consumers.
- introducing a €10,000 EU-wide threshold for micro-businesses for all of the above new rules.
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