EU member states to introduce B2C e-services foreign VAT threshold from January 2019

3 September 2018

From 1 January 2019, small suppliers of digital services will be able to charge VAT in their home country on sales of electronic services to consumers in other EU member states where the total amount of these sales is under a threshold of €10,000.

Currently there is no threshold for these types of sellers therefore the affected suppliers are required to charge VAT in the consumer’s country from the first sale that they make. They are then required to report and pay this VAT to that EU country either via a VAT registration or by using the Mini One-Stop-Shop VAT reporting mechanism.

However, EU member states are currently updating their VAT legislations in order to introduce this business to consumer (B2C) electronic services foreign VAT threshold, which will allow suppliers to avoid a VAT registration in the other EU member state until the €10,000 threshold is met.

The EU member states which have already introduced this into their VAT legislation include Austria, Finland and Germany.