VAT News

EU-Ecofin approves e-commerce package

At a meeting of Ecofin on 5 December 2017, the 'e-commerce package' containing a directive and two regulations was approved. These changes will be gradually implemented by 2021 and will change the VAT obligations of many e-commerce businesses.

The EU has outlined the following timetable for implementation:

2018

  • A set of thresholds (EUR 10 000 and EUR 100 000) for cross-border supplies of electronic services will be introduced to help microbusinesses and SMEs. This means in practice that only businesses with cross border sales of more than EUR 100 000 will be subject to the standard rules (distance selling).

2021

  • Building on the success of the mini One Stop Shop for electronic services (MOSS), this concept will be extended for online supplies of goods and to all cross-border services to end consumers.
  • The intra-EU distance sales regime and the small consignment exemption on imports will be removed in line with the commitment to apply the destination system for VAT.
  • The new One-Stop Shop (OSS) will also be extended to imports. Unlike today, VAT can be collected at the point of sale to EU customers by sellers or market places. Non-EU sellers will then declare the VAT using the OSS. These goods will then benefit from a fast-track customs mechanism.
  • Where the OSS is not used, a second simplification mechanism will be available to imports–VAT will be collected from customers on importation and a simple monthly declaration to customs will be transmitted by the transporter.

Related articles

Why overlooking the VAT determination process is detrimental in the era of tax digitalisation

As tax moves into the digital world, hundreds of thousands of organisations across Europe will face substantial challenges when it comes to adhering to VAT.

Read more
Infringement Proceedings Brought Against Germany Over E-commerce VAT Rules

The European Commission decided to initiate formal infringement proceedings against Germany over section 22f & 25e of the German VAT Act.

Read more
HMRC Issue Letters on No-Deal Brexit Advice For UK Businesses Trading within the EU

HMRC letters to VAT-registered businesses trading with the EU explaining how to prepare for changes to customs, excise and VAT if the UK leaves the EU without a deal.

Read more