EU Postpones E-Commerce VAT Package in Light of COVID-19

EU Postpones E-commerce VAT Package in Light of COVID-19

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Due to the practical difficulties created by the lockdown measures taken against the coronavirus pandemic, the European Council has agreed that the VAT e-commerce package should apply from July 1, 2021, rather than January 1, 2021.

Under the new VAT e-commerce package, all business-to-customer (B2C) supplies of goods to customers in the EU should in principle be taxed at destination. New obligations will be introduced for online marketplaces and platforms and their business users and VAT exemptions will be removed for low-value consignments. The EU will also improve and expand its mini one-stop shop (MOSS) system, practically turning it into a One Stop Shop (OSS) applicable to

  • B2C supplies of services other than telecommunications, broadcasting and electronic services
  • intra-EU distance sales of goods
  • certain domestic supplies of goods facilitated by electronic interfaces
  • distance sales of goods imported from third countries and third territories in consignments of an intrinsic value of maximum EUR 150

The new deadline should give Member States and businesses more time to prepare for the new rules.

By Balint Zsoldos, Head of Tax, KCG Partners Law Firm