Contributed by Yiallourides & Partners Ltd, Cyprus
The below changes to the EU e-commerce rules concerning Business to customers (B2C) will take effect as from 1 July 2021.
As from 1 July 2021 there will be two types of distance sales of goods:
- intra-community distance sales. These are business to consumer (B2C) Sales of goods dispatched from an EU Member State to a customer in another EU Member State
- distance sales of goods imported from third (non-EU) countries. These are B2C sales of goods from a third country to a customer in an EU Member State
For intra-community distance (B2C) Sales
- A new EU-wide turnover threshold of EUR 10 000, irrespective of the VAT registration thresholds per country, will replace the existing thresholds for distance sales of goods within the EU.
- The VAT to be charged will be that of the country of residence of the customer.
- The existing Union scheme of the Mini One Stop Shop (MOSS) is extended to cover both cross-border supplies of goods and services under the new portal, the One Stop Shop (OSS). The suppliers can declare and pay VAT due in all other Member States through the portal of their Member State of establishment. Otherwise, suppliers would have to register in each Member State where they make B2C distance sales.
For distance sales of goods imported from third (non-EU) countries
- The VAT small item exemption of EUR 22 will be removed. This means all goods imported into the EU from third countries will now be subject to VAT, which would normally be collected from the customer by the national postal service or a courier service.
To ease the process, the European Commission has introduced two optional systems:
- the Import one stop shop (IOSS) that allows businesses to collect the VAT at the time of the order and to declare and pay the VAT on these distance sales of imported goods for the whole EU in a single VAT return.
- the special arrangements that allow post and couriers to declare and pay the collected VAT on a monthly basis.
New Rules for Online Sales Platforms / Electronic Interfaces
Online platforms that are “deemed suppliers” will be responsible (jointly and severably with the actual supplier of the goods) for reporting and paying VAT on sales made by suppliers that use the platforms.
Platforms facilitating supplies of goods become “deemed suppliers” when they facilitate the distance sales of imported goods made by a seller and the goods are:
- distance sales of goods imported to the EU with a value not exceeding EUR 150 and not subject to excise duties; and/or
- supplies of goods to customers in the EU, irrespective of their value, when the underlying supplier/seller is not established in the EU (both domestic supplies and distance sales within the EU are covered).
The OSS/IOSS online portals are also available to online platforms / electronic interfaces facilitating these distance sale of goods. Again, if the electronic interface is established outside the EU, they will normally need to appoint an EU-established intermediary to fulfil their VAT obligations under the IOSS.Dated: [bxcode.pagedata.date]