The rules governing VAT on e-commerce will be upset in Europe in less than three months.
In fact, as of July 1, VAT exemptions on parcels with a value of less than 22 euros will disappear, other changes linked to the reform are also to be expected.
So what are the highlights of this reform?
The consecration of the principle of taxation at destination
This reform aims first of all to confirm the choice of the European Union in favor of the principle of taxation in the country of destination.
Thus, in principle, sales of goods will be subject to the VAT of the Member State of destination of the goods, rather than the VAT of the country of production, import or dispatch, whether the goods come from the country. European Union or a third country.
There will always be a sales threshold below which, for goods originating from the European Union, the VAT of the country of dispatch of the goods will apply by derogation.
However, this threshold will be significantly lowered and its conditions of application will be more stringent.
Marketplaces are (sometimes) deemed liable for VAT
Under the reform, electronic trading platforms are likely to become liable for VAT on the basis of sales made through them, even if they present themselves as a mere provider of a connection service.
These cases of "forced liability" of VAT will apply in particular when the goods sold have been imported, or are sold by a supplier established outside the European Union.
Declaration formalities are simplified
Persons liable to pay VAT on the occasion of the sale of goods or services to individuals (or similar) will be able to declare the VAT due on their transactions in one go and through a single portal ("one-stop-shop »), Without having to fulfill multiple and parallel declarative obligations in different Member States of the European Union.
Why a reform of the VAT system?
The VAT regime currently applicable to these transactions is no longer suited to the weight of international trade and recent technological developments, which now allow everyone to obtain supplies without difficulty from a seller established thousands of kilometers away.
The European Commission has therefore proposed a reform driven by three major axes:
- The fight against fraud;
- The alleviation of tax and declaration constraints;
- The fight against unfair competition from non-European suppliers.
What to do in practice?
Two actions must be carried out by e-commerce operators:
1. Check the VAT regime applicable to their sales flows from July 1, 2021: due to the changes mentioned, the amount of VAT due and / or the person liable to pay it could change drastically on this date;
2. Optimize their declaration processes to be able to benefit from the possibility of declaring, through "one-stop shops", the VAT due in respect of their e-commerce operations, in order to reduce their operational costs.
These actions can be carried out with the assistance of a competent council in these areas, in order to ensure the quality of the flow review carried out, and the optimization of the declarative processes put in place.
