EU e-commerce VAT plan

Thu 1st Dec 2016

On 1 December, the European Commission issued a range of measures to simplify the EU VAT regime, and make compliance easier for e-commerce. These will need to be agreed in full with the 28 member states.

The measures include:

  • 2017 Permitting member states to levy the same, reduced VAT rates on electronic books and journals as their paper equivalents.
  • 2018 Introduction of a €10,000 VAT registration threshold for declaring e-services sales to consumer in other EU member states. This relates to the VAT MOSS reforms of 2015, and the new requirement to charge VAT at the rate of a consumer’s country of residence. Companies may report sales to foreign consumers below €10,000 per annum through their domestic VAT returns. This will benefit some 430,000 companies that were eligible for MOSS registrations. There will also be limited compliance requirements on businesses with foreign turnover up to €100,000, including limited requirements on determining customers’ country of residence.
  • 2021 Extension of the Mini One-Stop-Shop single filing facility to B2C cross-border goods transactions. This will reduce foreign VAT registrations and returns for distance sellers – although not for merchants holding stock abroad in warehouses prior to local/domestic sales to consumers. The registration thresholds will be as per e-services, above.
  • 2021 Removal of the low-value consignment stock relief exemption. The allows packages below approximately €22 be sent from outside the EU to EU consumers without any VAT or customs liabilities.

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