The VAT rules for cross-border online sales are intended to change drastically as of 1 January 2021. The most important change is that online stores can pay the VAT on their sales to private individuals in other EU countries via the one-stop-shop scheme at the tax authorities. This measure would mean considerable simplification and cost saving of VAT compliance. It appears the delay of these rules is partly necessary due to the COVID-19 pandemic.

IT and COVID-19 cause delay

The European Commission will submit the proposal to postpone introduction of the new VAT rules to the member states of the European Union. Many countries are having problems with the timely implementation of IT, which should make it possible for online stores to submit VAT returns through the one-stop-shop scheme. We previously reported that the timely introduction of the new rules as of 1 January 2021 for the Dutch tax authorities was jeopardized by IT problems. We therefore expect the proposal to be approved and the delay until 1 July 2021 will be final soon.

Package of measures

In addition to the one-stop-shop simplification, the e-commerce VAT package contains more measures:

  • Ending of the complicated scheme and thresholds for distance sales.
  • One threshold of € 10.000 for all online sales to private individuals in other EU-countries than the country of dispatch.
  • Abolition of special exemption on imports of low value goods.
  • Simplifications for companies not established in the EU.

Non-EU countries are also taking measures

Non-EU countries such as Norway and Switzerland have already changed their VAT rules for online sales. The main purpose of the new rules is to simplify the payment of VAT and to make sure domestic and foreign online stores are treated equally for VAT purposes.

Do you have questions?

Our international VAT advisers will keep you informed on all developments regarding VAT and online sales in the near future. If you have any questions, please do not hesitate to contact your VAT adviser.


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