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VAT on e-commerce: between obligations for marketplaces and redefinition of thresholds, the fight against tax fraud is strengthened

The new VAT package on cross-border e-commerce will apply from July 1, 2021.

New rules governing VAT on cross-border e-commerce have been delayed until 1 July 2021, due to the health crisis. The ” VAT e-commerce package” adopted by the Council in 2017 aims to simplify VAT obligations for businesses making cross-border sales of goods or services online and to ensure that VAT on these transactions is correctly paid to the Member State where the supply takes place. These measures complement the mini one-stop shop (MOSS) introduced in 2015 and concern:

  • A redefinition of the VAT regime for intra-Community distance sales of goods (B2C)
  • The introduction of a one-stop VAT shop for the sale of goods and services
  • The abolition of the import VAT exemption for small consignments (up to €22) and of the import VAT declaration via the MOSS one-stop shop,
  • VAT liability of marketplaces on intra-EU imports and sales on behalf of their third party sellers located outside the EU. Marketplaces (such as Amazon, Ebay or Uber) will now be considered as suppliers of goods subject to VAT in certain situations. This measure in particular should enable Member States to combat VAT fraud, considering that 98% of sellers registered on e-commerce marketplaces were not registered for VAT in France in 2019, according to a report by the General Inspectorate of Finance.

The “VAT e-commerce package” also aims to facilitate cross-border trade and promote fair competition for EU businesses.