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New EU rules on VAT as of 2021

The hurdles to register in another EU country will as of 2021 be over with the One-Stop-Shop system, or maybe not so much as it looks like.

One-Stop-Shop and distance selling

A company than deals with VAT in its own country and in his own language. Please note that this will for B2C only. The B2B option will be valid as of 2022.

So this will be the end of all foreign registrations. No; as soon as the company delivers from another country as where it is based VAT will be processed from this country, when using an fulfilment centre in another EU country VAT will be obligated in that country.

VAT in 2021, Kennispunt

This sounds like a good deal doesn’t it? Well only for those who use the distance sales rule and sell out of their home country. For all those companies using in time fulfilment structures and ship their product out of other countries still have to deal with local tax offices and tax rules. And that is not all! As of 2021 all the different distance sales thresholds will disappear into one threshold of €10.000

Crossing over this EU threshold with all cross border sales to end user within the EU every sale over that threshold has to be taxed in that state where the shipment ends. Which will have to follow through the One Stop Shop.

Using foreign warehouses has direct effect on two kinds of transactions which at this moment cannot be dealt with through the One-Stop-Shop being: domestic supplies to end users in the country of the warehouse and inner community purchases when shipping goods from your home country to the foreign FBA warehouse.

E-platform liability

Next point is, E-platforms will be responsible for VAT from third country online sellers as of 2021. As of 2021 a fictive supply chain will be in place; the seller from a third country supplies to the e-platform, the platform supplies the customer. When the customer pays the platform will pay the vat.

So the E-platforms will be held liable for not paid vat to the tax office when they don’t hold a certificate of registration from this company at the tax office. This is already in place in Germany and will come in effect in 2019.