How the new One-Stop Shop EU VAT rules affect e-commerceThe impacts on tax compliance, sales channels, and the bottom line
The European Commission’s July 2021 value-added tax (VAT) rules were implemented to provide equity for organisations established inside and outside of the European Union’s 27 member states. As part of the regime, the One-Stop Shop (OSS) scheme and online portal was launched to streamline the VAT reporting process for business-to-consumer (B2C) e-commerce sales.
Due to the latest EU VAT rules, e-commerce businesses and marketplaces selling to EU consumers are faced with a myriad of new tax compliance challenges. Moreover, the entire transaction supply chain — sellers, consumers, sales and payment platforms, postal and freight operators, couriers, customers, and tax authorities — is impacted.
One noteworthy legislation now in effect is the expansion of the 2015 VAT rules to include the sale of goods to consumers in the EU. Another change impacts all B2C services within EU member states where the supplier is not established. Plus, certain domestic goods and the distance sales of goods valued up to a specific amount are subject to new VAT regulations.
On a favourable note, the OSS allows online sellers to remit a single return to one EU member state, versus filing multiple VAT registrations. However, three new OSS VAT returns have been introduced, including one for the distance sales of imported goods, and online sellers need to understand which one applies to them.
Get up to speed on the complex 2021 e-commerce EU VAT rules with our high-level overview on the OSS and its impact on online sellers, the entire supply chain, and your organisation’s VAT processes.
Read our special report to understand:
- Who is impacted by the new EU VAT rules
- The new thresholds for businesses selling e-commerce goods within the EU
- Which OSS VAT return to use and why
- The next steps and obligations for B2C e-commerce businesses
- The OSS VAT challenges for online sellers
- Why more EU VAT e-commerce regulations changes are imminent
- How corporate indirect tax teams can handle the new EU VAT rules