Which directives are at stake?
These changes take place within the framework of the Directive (EU) 2017/2455, of 5 December 2017, and the consequent Directive (EU) 2019/1995, of 21 November 2019.
With regard to the VAT system for intra-Community transactions (RITI), an update is also approved in the Decree-Law No 290/92, 28 December.
What is the purpose of these new VAT rules?
E-commerce is increasingly global and online stores no longer sell only to the country where they have their tax headquarters or physical establishments. These new amendments therefore seek to:
- Simplifying compliance with VAT obligations;
- Create neutrality in the treatment of the tax by EU member states;
- avoiding double taxation of VAT;
- Fight tax evasion.
How much does the new regime come into force?
The new regime officially entered into force on the day 1 January 2021, but due to the pandemic situation, the deadline for implementing the measures has been extended to 1 July 2021.
Which transactions are subject to these new VAT rules?
The new European directive comes modernising VAT rules and to introduce mechanisms to facilitate compliance of taxable persons with VAT obligations in the following transactions:
- provision of services;
- Distance sales;
- certain supplies of goods.
The main changes in ecommerce
Today, the number of online stores who sells abroad is ever-increasing.
Therefore, it is necessary to create mechanisms that faccelerating compliance tax obligations on the part of traders.
VAT is now taxed in the country of destination
Distance sales by EU businesses to final consumers established in an EU Member State are subject to VAT in the country of destination. Tax assessment is now made in the country of destination of the final consumer.
You can find out more about the fees applied in each EU Member State on the portal YourEurope.
The administrations of each country are then responsible for delivering the VAT paid in the countries where the transactions were consummated and the goods were made available to the purchasers.
Simplified taxation schemes for micro-enterprises and SMEs
micro-enterprises and recent enterprises with an annual turnover in distance selling of less than 10.000€, established within the Community, may opt to have the tax assessed in the country where the transport of the goods begins.End of VAT exemption for imported consignments up to €22
A VAT exemption ceases to exist for consignments of a value of €22 or less, coming from third countries and destined for the European Union. Such transactions are now subject to VAT.
Creation of a special VAT scheme for the import of consignments up to €150
A new one has been created special scheme for distance selling goods imported into the EU through digital platforms.
This scheme is applied when the economic operator does not use the VAT One Stop Shop, and is done through the application of a mechanism where VAT is collected by the reporting tax authority, which will pay the tax to the tax authority of the country of destination. Thus, there is no longer any need to pay the tax at the customs border. The scheme applies exclusively to consignments with an intrinsic value of up to €150 (the costs of sending the goods are not taken into account for the intrinsic value).
Extending the VAT One Stop Shop to all traders
O VAT One-Stop-Shop It can now be used by all operators. This body makes it possible to comply with the reporting obligations in the country of origin relating to distance sales carried out in the EU.
It is therefore no longer necessary to register with the VAT OSS in all countries where the goods or services are marketed.
Responsibility of marketplaces and digital platforms
The marketplaces, and other types of digital platforms that enable commercial transactions, become taxable persons when they act as intermediaries in distance sales of goods by companies based outside the EU.
These platforms have to keep records of the operations carried out through them, and provide all necessary information to the country's tax authority.
What types of e-platforms are considered?
An e-platform is an website, portal, marketplace or API through which the business transaction is processed.
When is an electronic platform considered as a taxable person and is obliged to account for VAT in the case of distance sales of imported goods?
An e-platform is taxable in two situations of distance sales of goods:
- The goods are not imported, but are sold by a supplier not established in the EU;
- The goods are imported and have an intrinsic value of less than €150.
This article aims to contribute to the clarification of issues related to legal and tax changes associated with transactions that occur in an online store. Reading it does not exempt from clarifications with entities specialized in these areas.
A creathing is exempt from any liability in decisions based on the content available in this article.
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