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The Council of the European Union agreed to postpone by 6 months the scheduled entry into force of the VAT e-commerce package – as of 1 July 2021 instead of 1 January 2021. 

Such followed the preliminary agreement reached on 24 June 2020 to postpone the same and is a measure taken in response to the implementation delays encountered by tax authorities and businesses as a result of the COVID-19 crisis.

The 6-month extension gives Member States and businesses more time to get their data, systems and processes ready for these major changes.

This is what VAT e-commerce package is about

According to the new regulations, an entrepreneur who sells goods or services online to consumers and exceeds the annual turnover threshold of 10,000 euros must make his tax returns in a new way.

This will be done via the OSS platform (corresponds to the Mini One Stop Shop (MOSS) portal). Companies must also submit quarterly tax returns through the portal, showing the value of their sales in each EU country. The tax on such transactions is paid at the VAT rates applicable in the country of the consumer.

Online retailers who sell goods worth up to € 150 previously imported from outside the EU must also register on the platform . The seller is obliged to calculate VAT and pay it in the OSS system. The VAT exemption for goods up to 22 euros will also be abolished.

Photo by Norma Mortenson from Pexels


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