EU Commission Proposes to postpone VAT E-Commerce Package
The rules for modernizing VAT for cross border B2C (Business to Consumer) e-commerce were fixed to be applicable as from January 1 2021. However due to the outbreak of COVID-19, Member States had to shift priorities and can therefore no longer guarantee to finalize the work to be ready for this by the end of December 2020.
Date New VAT rules for e-commerce postponed
In this respect, on May 8, 2020, the European Commission published a series of proposals relating to the entry into force of the new VAT rules for e-commerce. According to the proposals, the date of January 1, 2021 will be postponed by 6 months and the new rules will enter into force on July 1, 2021. It is likely that the proposal will be accepted by the EU Parliament and Council.
VAT E-commerce package
The VAT E-Commerce package contains rules for the extension of the One-Stop-Shop scheme (OSS) to distance sales of goods and all services supplied to consumers (non-taxable persons), the abolishment of the threshold for distance sales in the EU (EU cross border sales of goods B2C) and the B2C importation of goods (IOSS).
In addition the elimination of the small consignment VAT exemption (Euro 22) and a VAT reporting and payment liability will be introduced for online platforms, making such platforms liable for collecting VAT on the supplies of goods that they facilitate.
Proposals published by the EU Commission
The Commission published the following three proposals:
- Proposal for a Council Regulation amending Regulation (EU) 2017/2454 as regards the dates of application due to the outbreak of the COVID-19 pandemic;
- Proposal for a Council Decision amending Directives (EU) 2017/2455 and (EU) 2019/1995 as regards the dates of transposition and application due to the outbreak of the COVID-19 pandemic; and
- Proposal for a Council Implementing Regulation amending Implementing Regulation (EU) 2019/2026 as regards the dates of application due to the outbreak of the COVID-19 pandemic.