E-commerce business

E-commerce business

Get ready for a rollercoaster ride

New VAT rules for e-commerce

E-commerce businesses selling products to EU-consumers will be facing significant changes as of July 1 2021. As from July 1, the new VAT rules for e-commerce will be in effect. These changes will have a substantial impact on your tax and business processes. If handled wisely they can also be the starting point of new opportunities. How will the new VAT rules impact your e-commerce organisation? We will explain your options below and advise you on everything you need to know about the new VAT legislation.

What do I need to know?

We know you have more exciting things to do, so we will keep it short and simple. Click on the following subjects to find out how this might impact your business, and what steps to take to stay ahead of the game.

This new legislation concerns your e-commerce business when your sales are considered “distance sales”, because the following conditions are met:

  • You import goods from outside the EU and sell them to consumers (private persons or businesses without a VAT-number) in other EU-countries.
  • You are involved in the transportation of goods to consumers
  • You have a revenue of at least €10.000 per annum from selling goods or digital services to consumers in other EU- countries

As of July 1 2021 the threshold for the application of the current distance sales legislation will be abolished. This means that all your deliveries to consumers in the EU are taxed, for VAT purposes, in the EU-country of the consumer. Therefor you would have to register and pay VAT in all EU-countries where your consumers are located.

Fortunately the legislators have introduced an administrative facilitation, called the (I)OSS. With the (I)OSS you can file one VAT return for all your distance sales to customers in the EU. This means you don’t have to register and pay VAT in all the countries that your consumers are located in. Consequently, non-EU businesses can pick a country of choice to register for the (IOSS)

More information

More information

In the upcoming weeks the legislators will publish more details about the new rules. Keep following us, so you don’t miss out on any updates. If you have any questions or comments, please feel free to contact us by e-mail: info@flynth.nl.