The European Commission today issued a release concerning an agreement reached by EU Member States on detailed measures needed to simplify the value added tax (VAT) collection rules for sales of goods online. The new rules are intended to provide for a smooth introduction of the new VAT measures for e-commerce (as agreed to in December 2017) and to be effective in January 2021.
As explained in an EC release, when non-EU companies—including those that use warehouses or fulfilment centres in the EU—sell goods to EU consumers through online marketplaces, it can be difficult for tax authorities to collect the VAT due on those goods.
Final adoption of the new rules will be possible when the consultative opinion of the European Parliament becomes available. EU Member States can rely on the rules adopted today to start extending their IT systems.
The new VAT rules will apply from 1 January 2021 with EU Member States having until the end of 2020 to transpose the new rules of the VAT Directive into their national legislation. Businesses seeking to make use of the extended “VAT One Stop Shop” can start registering in EU Member States beginning 1 October 2020.
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