New VAT rules for eCommerce and related activities from 1 July 2021

New VAT rules will come into effect for cross-border business-to-consumer (“B2C”) e-commerce activities carried out within the EU from 1 July 2021. These new VAT rules are significant, wide ranging and complex.

Online sellers including online marketplaces/platforms can register in one EU Member State to declare and pay VAT on distance sales of goods and cross bother supplies of services to customers (B2C). This is known as the One Stop Shop (OSS). This is an extension of the Mini One Stop Shop (MOSS) regime which was limited to telecommunication, broadcasting and electronically supply services.

The existing thresholds for distance sales of goods within the EU will be abolished and replaced by a new EU wide threshold of €10,000. Below this threshold the supplies of such services may remain subject to VAT in the member State where the taxable person is established

Special provisions are introduced where online marketplaces/ platforms facilitating supplies of goods are deemed for VAT purposes to have received and supplied the goods themselves (deemed supplier).

The VAT exemption at importation of small consignments of a value of up to €22 will be removed resulting in all goods being imported into the EU now being subject to VAT. However, the Import One Stop Shop (IOSS) is being introduced to simplify the declaration and payment of VAT

It is important that Irish businesses are aware of the impact of these new VAT rules on their activities and consider what actions (if any) are required to adapt to these changes, which could include pricing adjustments, IT system changes and internal process updates.

Please contact us today at 053 9170507 or email gskelton@rda.ie to discuss how these changes may impact your business and how the RDA Tax Team can assist.