The e-commerce VAT package
Context
To facilitate B2C e-commerce within the European Union and fight VAT fraud, a major reform of VAT rules came into force on 1st July 2021. This updates and simplifies existing rules. Loss of VAT revenue in the e-commerce nos-specialisations are estimated at a minimum of €5 billion annually within the European Union. The new rules should enable member States to receive an additional €7 billion in tax revenue annually from 2021. The new system facilitates online sales within the EU, in particular for start-ups and SMEs, by reducing compliance costs.
The e-commerce VAT package relates to B2C goods and services within the European Union and comprises four principal headings:
- Remote sales of goods within the community,
- B2C services which are taxable in a member States other than that of the provider,
- Remote sales of imported goods within the community,
- Marketplaces.
A major reform
1 | Remote sales of goods within the European Union and One-Stop Shop (OSS)
This relates to the remote sale of goods up until 30 June 2021, exceeding a threshold (usually €35K or €100K) set by each member States triggering an obligation for the seller to register for VAT and file returns in each country in question. Obligations which are demanding and expensive for a large number of companies. From 1st July 2021, national rules are amended: thresholds set by the 27 member States are cancelled and replaced by one single threshold of €10,000 to ensure that tax is paid where the goods are consumed. Above this threshold, remote sales of goods within the European union are taxed by member States on arrival at local VAT rates. To enable these new rules to be implemented, a One-Stop Shop (OSS) has been created. By opting for this One-Stop scheme, companies file their return of e-commerce transactions carried out throughout the European Union in one single member State. Filing and payment of VAT is by a portal which is hosted by the taxation authorities of member States which then repays VAT to the relevant member States. This simplification enables businesses to avoid registering for VAT in each member State in which their customers are resident.
2 | Widening the OSS system to all B2C services which are taxable in a member State other than that of the provider
The Mini One-Stop Shop (MOSS) was limited to services supplied electronically and telecommunications, radio broadcasting and television services. From 1st July 2021, the scope of the One-Stop Shop has been widened to all B2C services taxable in a member State other than that of the provider. This means that a French provider of B2C services taxable in the member State of its customers may now use the OSS to declare transactions carried out throughout the European Union in France.
3 | Import One-Stop Shop (IOSS)
A One-Stop Shop has been created for remote sales of imported goods from non-EU countries where the value does not exceed €150. This is known as the “Import One-Stop Shop” or “IOSS” This scheme is based on exemption of VAT upon import, accelerated customs clearance and collection of VAT in recipient member States via IOSS.
4 | Making Marketplaces Responsible
Marketplaces (on-line platforms putting supplier and purchaser in contact resulting in a sale of goods online (“taxpayer facilitators”) become liable for VAT when they facilitate the following transactions:
- Remote sales of goods imported from a non-EU country by non-EU sellers,
- Remote sales of goods within the EU carried out by non-EU sellers,
- French domestic sales carried out by non-EU sellers.
Our services
Registration with the various One-Stop Shop and Import One-Stop Shop regimes commenced on 21st April 2021 to enable companies to be operational on 1st July 2021.
You are:
- A French company selling B2C goods or services online within the European Union,
- A non-European Union company selling B2C goods or services online within the European Union.
We offer:
- Support in registering for OSS and IOSS regimes with French taxation authorities,
- VAT compliance services, preparation and filing of OSS and IOSS returns,
- VAT consultancy services.
