Changes to EU VAT regulations

The changes, which came into force on 1 July 2021, will affect all businesses
trading, but especially business-to-consumer (B2C) resellers and online marketplaces
selling to European customers, whether based in the EU or outside the EU.*
The changes could streamline procedures and administrative burdens, as well as have
effects on the way you do business in the EU.


1. Elimination of exemption from payment of VAT on imports with a value
of less than €22
From 1 July 2021, all commercial goods imported into the EU will be subject to VAT,
regardless of their value. For consignments with a value of €150 or less,
VAT can be charged at the time of sale using the new Import
One-Stop-Shop (IOSS), or it can be collected from the end customer by the person
responsible for the customs declaration.
European activities selling goods between EU Member States will not be affected
by the removal of the € 22 threshold for low value goods. On the contrary, European activities
selling goods imported into the EU will no longer be able to import consignments with a value
of less than € 22 under a VAT-free regime.

2. Introduction of a one-stop-shop (OSS)
By joining the OSS scheme, businesses will no longer have to register a VAT number
in each EU country they sell to. In addition to introducing the OSS, the EU also eliminates the
tax regime with VAT thresholds on distance sales. This will mean that companies will be required to
charge the VAT rate of the European country of residence of the customer from the first sale
and not only when a certain threshold is reached.
Instead of registering VAT numbers in several EU countries, companies will have the option of
submitting a quarterly return to the OSS indicating all their sales that qualify for

customers within the European Union. The VAT will be paid to the national tax authority, which
will then transfer it to the countries to which it is due.
For online retailers, this could mean less complexity and a reduction in the
costs of complying with cross-border VAT requirements, potentially facilitating
international trade.
As an exception to the general rule, EU businesses established in one of the EU's
member countries that make cross-border sales of business-to-
consumer (B2C) products and services of less than €10,000 per year may apply their domestic VAT and
include these sales in their national VAT return.

3. Some online marketplaces will become responsible for collecting VAT

Marketplaces covered by the new European VAT system are, for instance, the
online platforms that facilitate sales transactions. These allow retailers
to sell their products directly to customers.
Some marketplaces will be responsible for collecting, declaring and remitting the VAT
due instead of the retailers using them. The collection of VAT by
marketplaces applies to the following transactions:
B2C imports of shipments with a maximum value of €150 to the EU
(where the marketplace has opted for IOSS declaration).
Domestic and inter-EU sales of goods by sellers not based in
EU to customers within the EU.
For B2C imports of shipments with a value of 150 €, if the marketplace
has chosen to use the IOSS declaration, companies selling through this
platform will use the IOSS number of the marketplace and provide it to the
party responsible for filing the customs declaration.
Businesses that use multiple marketplaces to sell their goods must submit an
explicit proof of sales made through each marketplace. They must also provide the
party responsible for the customs declaration with the corresponding IOSS number for each sale.
Non-EU companies that use online marketplaces to sell goods on
domestic territory and in the EU to EU customers may have the possibility to close their foreign VAT registration numbers
in EU Member States, as the marketplace will become, for tax purposes, the entity
responsible for the supply of the goods and thus for the collection of VAT. This could
reduce the administrative burden for non-EU sellers.

4. Chronology of changes
We have summarised in the table below the changes that will be introduced with the new
Up to 30/06/2021 After 01/07/2021
EU sellers to
EU customers

VAT depends on a number of factors, you may be asked for the

registration in several countries.

Only one EU VAT registration is required,
together with the simple completion of the

OSS documentation.

Sellers from third countries
to European customers

According to the VAT rules applicable until 1 July 2021, no
import VAT needs to be paid on goods
of a value up to EUR 22.

VAT must be collected at the POS, the rate depends on the

country of destination.

EU VAT registration required, together with
submission of an OSS declaration of a

third country.

5. Selling through an independent platform (Shopify, WooCommerce, etc.)
If you sell in your store built with a platform such as, Shopify, WooCommerce or
Storeden, you have 2 options:
You have an IOSS number
If you are already registered to the IOSS platform and you have a registration number you can upload it
in the settings area within the Dashboard, this way you can switch to the
forwarder who will deliver your parcels in the EU without applying any additional costs

This way you manage the VAT internally in your shop so that you can set the correct
rates for each country, 17% for Luxembourg and 22% for Italy.
You don't have an IOSS number
If you don't have an IOSS number yet, you can still continue to
ship products to the EU, but you will have to pay extra to the shipping company.
For this reason, as of 24 June, if you do not submit your IOSS number, you will see an additional charge
at the time of payment for any order going to an EU country
Please also remember that you must add the correct VAT values within the settings of
your shop for each country you intend to sell to. As you can see below,
these vary from 17% in Luxembourg to 27% in Hungary:
1. Austria 20%
2. Belgium 21%
3. Bulgaria 20%
4. Croatia 25%
5. Cyprus 19%
6. Czech Republic 21%
7. Denmark 25%.

8. Estonia 20%
9. Finland 24%
10. France 20%
11. Germany 19%
12. Greece 24%
13. Hungary 27%
14. Ireland 23%
15. Italy 22%
16. Lithuania 21%
17. Latvia 21%
18. Luxembourg 17%
19. Malta 18%
20. The Netherlands 21%
21. Poland 23%
22. Portugal 23%
23. Romania 19%
24. Slovakia 20%
25. Slovenia 22%
26. Spain 21%
27. Sweden 25%.

Author: admin