EU confirms ecommerce VAT package July 1, 2021
- May 27, 2021
The European Commission (EC) has confirmed the launch on July 1 2021 of its ecommerce VAT package. There had already been a delay from January 1 2021, announced last year in recognition of the difficult COVID-19 trading conditions.
A number of states, particularly the Netherlands and Germany, have been pushing for a second delay. But this was resisted by states including France. The EC and most member states are anxious to complete the planned reforms to help close an estimated €7billion fraud gap in pan-EU ecommerce. The July 1 reforms include:
Ending the €22 import VAT exemption and requiring the charging of import VAT on consignments not exceeding €150. This includes a new Import One-Stop Shop (IOSS) return·.
Withdrawal of the distance selling thresholds and introduction of a new One-Stop Shop (OSS) return.
Imposing ‘deemed supplier’ obligations on marketplaces for certain merchant transactions.
The new IOSS scheme will unlock Europe for ecommerce businesses, allowing them to sell to all 27 EU member states with one VAT return. With pan-European online sales topping €700billion in 2020, this presents a huge opportunity to access the world’s largest trading bloc.
Find out more about Avalara’s IOSS solution and how you can get registered before July 1.