New VAT rules for e-commerce as of 1 July 2021

As from July 1st 2021, VAT exemption for imports of goods whose value does not exceed 22 Euro will disappear. These new VAT rules will create a level playing field for EU businesses and simplify the VAT rules.

  • Why are the VAT rules for e-commerce changing? For which advantages?

    • Thanks to these new rules, VAT will be paid where the consumption of goods or services takes place.
    • This allows to create a uniform VAT regime for cross-border deliveries of goods and supplies of services.
    • As a business, you will have a simple and uniform system for declaring and paying your VAT obligations in the EU through the One Stop Shop (OSS) system.
  • Which enterprises can use the OSS?

    Any enterprise that sells goods or services online or has an online sales area or platform. See also: What is the OSS and who can use it?

  • Which transactions are covered by the One-Stop Shop (OSS) system for VAT?

    • All cross-border services supplied to buyers.
    • All distance sales of goods within the EU and some domestic sales made possible by online sales areas.
    • All distance sales of goods imported from outside the EU in consignments whose value does not exceed 150 Euro.
  • How to use the One Stop Shop for VAT?

    • You register in a single EU Member State. This single registration is valid throughout Europe.
    • You declare and pay VAT due on all eligible cross-border sales in the EU only in the country where you are registered.
  • Which are the advantages for the buyers in regard of your OSS registration?

    • Buyers know the full price of the goods (including VAT) at the time they purchase the goods online.
    • Buyers benefit from faster delivery of goods and do not have to pay unexpected taxes or customs charges.
  • What is the Import one-stop shop (IOSS)?

    The Import One Stop Shop (IOSS) is a component of the One Stop Shop (OSS) system. You can use it if you carry out extra-Community distance sales of goods coming from third countries. More information about it.

  • Which transactions are covered by the Import One Stop Shop (IOSS) system?

    As from July 1st 2021, all goods imported into the EU will be subject to the payment of VAT. If the sale of goods to EU buyers is made through an electronic interface, the sale is considered effective and the buyer will be liable for VAT.

  • How can an e-interface declare and pay VAT on imported goods?

    If you register as an electronic interface through the IOSS system, you can use this system to pay the declaration and VAT on the distance sale of imported goods whose value does not exceed 150 Euro.

  • What are the advantages of the IOSS?

    • IOSS makes it easier to collect, declare and pay VAT for electronic interfaces that enable the distance selling of imported goods to EU buyers.
    • All costs are accounted for to the buyer only at the time of purchase. When the goods are delivered, the buyer does not have to pay any unexpected costs.
  • When is an electronic interface subject to VAT on distance sales of imported goods?

    The electronic interface is acknowledged for distance selling of imported goods when:

    • a buyer and a seller are brought into contact by that electronic interface
    • resulting in the sale of the goods to that buyer,
    • the goods are not subject to excise duty,
    • And the value of the consignment does not exceed 150 Euro.
  • How does the IOSS work?

    As an electronic interface registered with IOSS, you pay the VAT and not the actual seller. The VAT rate is the rate applicable in the Member State where the goods are to be delivered.

  • How do I register for the IOSS?

    As an electronic interface, you can register on the IOSS portal of a Member State. If your electronic interface is not established in the EU, you must appoint an intermediary established in the EU.

  • What obligations must the electronic interface using the IOSS fulfil?

    • The e-interface must indicate the amount of VAT due by the EU purchaser at the latest when the ordering process is completed
    • The e-interface must collect VAT from the purchaser on the supply of all eligible goods whose final destination is an EU Member State.
    • The electronic interface must, wherever possible, show the price paid by the buyer in Euro on the invoice.
    • The e-interface must submit a monthly VAT return electronically via the IOSS portal of the Member State where the e-interface is registered for IOSS and make a monthly VAT payment as indicated in the VAT return.
    • The electronic interface must keep accounting records of all IOSS sales it has made for 10 years.
    • The electronic interface must work with the actual seller of the goods to ensure that the information required for EU customs clearance, including the IOSS VAT identification number, reaches the EU customs office where the goods are imported.