If a platform facilitates your sales and you are:
- a non-EU business shipping within the EU and/or importing low-value goods from third countries directly to final customers in the EU; or
- an EU business importing low-value goods from third countries directly to final customers in the EU,
then you need to be ready for the following changes.
Platforms are considered deemed suppliers
As of 1 July 2021, if a platform facilitates sales by an actual seller (meaning that the platform brings the actual seller in contact with a customer resulting in the supply of a good via the platform) then in certain cases the platform becomes liable for charging and reporting VAT if a so-called platform fiction applies (i.e. the platform becomes a deemed supplier.)
In cases where a platform facilitates sales of the actual seller (so-called “underlying supplier”, hereafter also a “seller”) then the platform becomes a deemed supplier where the following conditions are met:
- Non-Union goods not exceeding EUR 150 are imported and shipped directly to a customer in the EU, irrespective of where the seller is established;
- Union goods, irrespective of their value, are supplied to customers in the EU from a location in the EU, if the seller is not established in the EU.
What are VAT consequences if a platform is considered a deemed supplier?
The single supply from the (actual) seller to its customer is split into two supplies:
- a supply from the seller to the platform (deemed B2B supply), which is treated as a supply without transport subject to a zero-rate VAT, and
- a supply from the platform to the customer (deemed B2C supply), which is the supply to which the transport is allocated.
What does this mean for you?
If a platform is considered a deemed supplier, it is liable to charge VAT from your customers and to report and pay this VAT to the tax authorities. The (actual) seller of the goods is not allowed to charge VAT from their customers if the platform becomes a deemed supplier. You are liable to provide the complete information to the platform.
Impact on business relationships and on internal business processes
If you sell via platforms:
- You need to differentiate between the sales via your own webshop and sales via platforms that are considered deemed suppliers.
- Changes may be required in your transactions’ mapping and IT systems because of the changes in the VAT treatment of your sales.
- Changes may be required in your invoicing or contracts because the VAT liability on your sales via platforms that are considered deemed suppliers shifts from you to platforms.
- If you are not only selling via platforms but also via your own webshop, please find more information at our website.
Grant Thornton’s international indirect tax team and digital advisory team can assist you in your VAT / customs matters, compliance and update of your systems and processes.
Grant Thornton Netherlands has tools and software which can make your VAT compliance and (I)OSS reporting simple.