Get the latest insights on compliance for the new EU VAT rules





On 1 July 2021, all 27 European Union countries rolled out new e-commerce VAT schemes. Their introduction in addition to the UK’s recent changes to the rules regarding overseas goods sold to customers in the UK, means businesses across the world need to implement new systems.

Get yourself familiarized with how the new EU VAT schemes  affect your business operations and compliance obligations in both the EU and your home-country.



IOSS import one stop shop

What has since July 1, 2021?

A single registration  in all EU Member States

Online sellers, including online marketplaces or platforms can register in one EU Member State and this is valid for the declaration and payment of VAT on all distance sales of goods and cross-border supplies of services to customers within the EU.




New EU-wide threshold of EUR 10 000

The previous thresholds for distance sales of goods within the EU have been abolished and replaced by a new EU-wide threshold of EUR 10 000. Below the 10 000 EUR threshold, supplies of TBE (telecommunications, broadcasting and electronic) services and distance sales of goods within the EU may remain subject to VAT in the Member State where the taxable person is established.



Online marketplaces become deeded suppliers

Online marketplaces or platforms facilitating supplies of goods are, in certain circumstances, deemed for VAT purposes to have received and supplied the goods themselves (“deemed supplier”).



End of low value relief consignments

The VAT exemption at importation of small consignments of a value up to EUR 22 is removed. This means all goods imported in the EU are subject to VAT. Excise goods are not exempt from VAT. The excise goods such as alcohol and tobacco are not eligible for OSS nor IOSS



New record keeping requirements

In addition, there are new record keeping requirements for online marketplaces/platforms that facilitate supplies of goods and services, including where such online marketplaces/platform are not a deemed supplier.

Who is affected by the changes?


E-commerce sellers

All e-commerce sellers from inside the EU and outside the EU, selling goods  valued at below 150 EUR are affected.



Online marketplaces that facilitate sales inside and outside the EU (such as Amazon, AliExpress, Ebay, Etsy) will be affected as well.

EU customers

EU consumers will have to pay VAT for every on-line purchase made from outside the EU. In some cases they have to pay VAT and customs clearance fee to a postal operator.

Post office operators

Postal operators and couriers will need to follow a new procedure for checking the VAT compliance of consignments, and in some cases,  collect VAT for a consignment.


Why the EU VAT system needed changes?


B2C sellers burdened with administrative obligations

Sellers had to register and file VAT in each of the EU country (up to 27) when their sales exceeds the threshold


Structural undervaluation and disadvantage to EU sellers

EU businesses could not compete with non-EU businesses selling goods from 3rd countries can make VAT-free supplies into the EU


EU member states lose their tax-revenue

Consumers buying goods from outside the EU did not need to pay VAT on online purchases below 22 EUR




How do changes benefit sellers ?


Reduction in cross-border VAT compliance costs and overheads

  • as sales across all 27 EU member states can be reported with just a single VAT registration
  • VAT registration only required in countries where goods are stored/shipped from


EU businesses will be able to compete on equal footing with non-EU businesses that are not charging VAT




How do changes benefit sellers


Transparent and accurate pricing at check-out

More efficient delivery time as consignments will be subject to an expedited customs process


The overview of the new EU VAT schemes


How does OSS work?

OSS enables some sellers to report all their pan-EU distance sales on a single VAT return in just one EU country instead of having multiple VAT registrations across the EU. Sellers can declare and pay the VAT in a single electronic quarterly return.

For sales from a warehouse or fulfillment center in another country, a foreign VAT registration will still be required



Facts about OSS

OSS came into effect 1 July 2021

The threshold of 10 000 EUR will apply for all EU countries combined

OSS is not compulsory but recommended

Reporting the OSS VAT returns and payments is required on quarterly basis



OSS applies to:

All business-to-consumer (B2C) sales of goods and services within the EU

Distance sales of goods into the EU



Who can use OSS?

OSS can be used by both the EU and non-EU sellers

A seller must register with at least a single EU member state to file an OSS return for their business-to-consumer (B2C) sales of goods within the EU

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