ECOFIN agree on E-Commerce VAT regime reforms for online sellers

21 December 2017

On 5 December 2017, the EU’s Economic and Financial Affairs Council (ECOFIN), which is a council consisting of economic and finance ministers from all EU member states that are responsible for setting economic and taxation policies within the EU, reached an agreement on a series of reforms that will simplify the E-Commerce VAT regime within the EU.

These reforms will apply to the collection of VAT when consumers buy goods and services online and are to be phased in from 2019, please see below for a full list of the new measures:

  • Simplified VAT rules for start-ups, micro-businesses and SMEs selling electronic services to consumers online in other EU Member States. This will involve the VAT on cross-border sales under €10,000 a year being handled according to the rules of the sellers home country and also simpler procedures for cross-border sales of up to €100,000 annually. Further information on these measures will be released in due course and it is expected that they will be introduced by
    1 January 2019.
  • From 1 January 2021, all companies that sell goods to EU consumers online will be able to deal with their VAT obligations through one easy-to-use online portal. This will be an extension to the Mini One Stop Shop (MOSS), currently used for reporting and paying VAT on electronic service sales to consumers.  Once in use it will allow the seller to report and pay the foreign VAT to all member states through their own EU member states’ VAT online portal and will mean merchants will not have to VAT register in every single country that they are selling goods
    to consumers.
  • Large online marketplaces will become liable for the VAT amounts owed by non-EU merchants selling to EU consumers via their platforms.
  • Removal of the €22 small value consignment VAT exemption on goods being imported into the EU. This will remove the unfair advantage that this gives to non-EU sellers over EU resident providers who have to account for VAT on all goods regardless of the value.

For the full detail in regards to the proposed reforms, please refer to the link from the Europa website here.


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