From July 1st 2021, there will be sweeping reforms to the VAT obligations of merchants, introduced by the EU. These rules will not only affect UK merchants, but also US merchants selling into the EU.
In this definitive guidebook, we’ll go through all of the VAT reforms that the EU are implementing, what the impact is for merchants, and what US/UK merchants need to do in order to continue selling into the EU
These new rules will:
Create a more simplified and transparent VAT system for cross-border ecommerce
Re-establish fair competition between European and US/UK markets
Offer businesses a simple and uniform system to declare and pay their VAT in the EU via the VAT One Stop Shop/Import One Stop Shop.
One EU ecommerce VAT return
From 1 July 'Distance Selling Thresholds' will be removed and a One Stop Shop (OSS) EU VAT return will be introduced.
Removal of €22 VAT exemption
VAT must now be charged at the point-of-sale for consignments not exceeding €150, which is declared and paid through the IOSS (Import One Stop Shop).
Orders above or below €150
The process for VAT being charged on orders above or below €150 has changed and needs to be accounted for in the ecommerce sales process
