New VAT rules governing cross-border online commerce take effect on Thursday 1 July in member states of the European Union.
The new rules apply to all components of the supply chain, from online vendors, markets and platforms trading within and outside the EU to postal services, transporters, customs, tax administrations, and consumers.
Under the new regulations, imported goods valued at €22 or less will no longer be exempted from VAT.
Online vendors can register in an EU Member State to declare and pay VAT on all goods sales and service deliveries to customers located within the EU. The registration will be done through a new One-Stop-Shop (OSS).
Consumers making purchases from non-European online vendors will clearly have an interest in choosing OSS-registered sellers since it is them who would then pay VAT and import costs.
Online markets and platforms that facilitate the delivery of goods will become the deemed supplier of the goods, and they will be responsible for collecting VAT at the time of sale. Marketplaces will also be required to keep a record of sellers’ transactions for allowing VAT audits.
The advantage for consumers is that the VAT rates will always be the same as those that apply to goods bought in their own countries.
The Brussels Times