On 5 December 2017, the EU Council adopted the 'VAT e-commerce package'. This package includes the introduction of a specific VAT liability for online marketplaces as of 2021. Per the same date the exemption for the import of small value consignments will be abolished. The package further contains measures to cut red tape for e-commerce traders.
VAT liability for online market places
As of 2021, online marketplaces must generally collect VAT on sales of goods on their platforms that are made by non-EU suppliers to consumers in the EU. This includes sales by non-EU suppliers of goods already stored in warehouses within the EU (so-called 'fulfilment centres').
Import of small consignments no longer VAT exempt
As of 2021, the current VAT-exemption for the import of small consignments from non-EU countries (with an intrinsic value not exceeding EUR 22) will no longer be available.
Making e-commerce easier
As of 2019, a yearly threshold of EUR 10,000 is introduced for (small or medium sized) online companies providing cross-border e-services, under which these e-services to other EU countries are treated as domestic sales, with VAT paid to their own tax administration. As of 2021, this threshold of EUR 10,000 will apply be extended to all cross-border sales of goods to consumers in other EU countries. Such cross-border "distance sales of goods" below the yearly threshold of 10,000 EUR will then also be treated as domestic sales by (online) companies, with VAT paid to their own tax administration.
As of 2021, (online) companies making cross-border sales of goods to consumers in other EU countries for more than EUR 10,000 per year will be able to take care of their VAT obligations in the EU through a single digital online portal, hosted by their own tax administration and in their own language ('One Stop Shop'). At this moment, this facility is only available for online sellers of electronic services (the current 'Mini One Stop Shop', or 'MOSS').
Also as of 2021, a specific regime is introduced for consignments with a maximum value of EUR 150 which are imported and subsequently transported to consumers in another EU country. Provided that certain conditions are met, no import VAT becomes due in the country of importation. Instead, VAT must be paid in the country of the consumer.
Actions to consider
Many companies involved in e-commerce will be affected by the new rules. We recommend to review the impact of the new rules and make amendments were required.