EU Member States today reached political agreement on more details regarding when an online marketplace will be responsible for ensuring that VAT is collected on sales on their platform by companies from non-EU countries.
The VAT measures for e-commerce were agreed in December 2017 and will come into force in January 2021. The agreement reached today aims to create a smooth transition to the new system.
The new rules concern when online marketplaces are considered to facilitate such supplies based on whether or not they are setting the terms and conditions of the supply and their involvement in the payment or ordering and delivery of the goods.
The new rules also specify in detail what kind of records have to be kept by platforms facilitating supplies of goods or services to customers in the EU.
“Step by step we are plugging the gaps through which tax revenues are lost, depriving EU countries of funds that could be used for public services and investment. At the same time, we are bringing VAT rules into the 21st century, adapting them to an increasingly digital and globalized economy. Businesses should look forward to a smooth transition to the broader VAT system for e-commerce in 2021,” said Commissioner for Economic and Financial Affairs, Taxation and Customs Union, Pierre Moscovici.
The agreement was based on a proposal for VAT implementing rules for e-commerce.
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