VAT News

New details on rules for e-commerce presented by European Commission

A new VAT system for e-commerce sellers

The new framework is supposed to come into force in 2021. The new rules introduce the fundamentals for the system that will be needed for online companies to take full advantage of the EU's Single Market.

The game changer is the implementation of an electronic business portal for VAT or 'One-Stop Shop'. This will allow companies that sell goods online to their customers to deal with their VAT obligations in the EU through one easy-to-use online portal in their own language.

Ensuring that VAT is paid by independent seller when goods are sold on marketplaces

From 2021, large online marketplaces (like Amazon or ebay) will become responsible for ensuring that VAT is collected on sales of goods by non-EU companies to EU consumers taking place on their platforms. Since these online marketplaces will be liable for the missing VAT, authorities will be sure that they can claim the tax due when sellers from outside the EU have not complied with the rules.

In particular, the new rules are aimed at ensuring that goods sold from fulfilment centres within the EU must now have the correct amount of VAT charged

Next steps

Today's proposed implementing rules will now be sent to Member States in the Council for agreement and to the European Parliament for consultation. The Commission calls for a quick agreement in 2019 so that businesses can look forward to a smooth transition to the broader VAT system for e-commerce in 2021.

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