EU makes marketplaces liable for VAT from 2021


During December 2018, the European Commission proposed new rules which could make online marketplaces responsible for the reporting and payment of VAT on certain Business to Consumer cross-border sales made by sellers on their websites.

If accepted, from January 2021 online marketplaces will be considered as the supplier of the goods for VAT purposes. This is applicable where goods are imported by a merchant into one EU country and then moved to another EU country via the online marketplace for an onward sale at a value of less than €150 to a consumer.

It is hoped that this will help to prevent VAT fraud which is rife in this area and if accepted could simplify the VAT compliance requirements for small e-commerce merchants.