Certain e-commerce sellers and marketplaces may be affected by the EU's revised value added tax (VAT) rules. Under these new rules, which will affect business-to-consumer e-commerce sellers and marketplaces, "low-value" goods will no longer be exempt from VAT, as of July 1, 2021. Therefore, the EU says all commercial goods imported into the EU will be subject to VAT at the applicable VAT rates upon arrival.
In general, VAT can be collected on these transactions under one of two methods:
- The customs declarant pays import VAT upon importation, and then recovers it either from the customer or the supplier
- The supplier registers for the "import one-stop shop" (IOSS) and collects VAT from the customer at the point of sale.
If the affected e-commerce seller chooses the IOSS method, import VAT is not due at the time of importation.
For more information, see a recent alert from KPMG's U.S. member firm, "EU: VAT Rules Affecting E-Commerce Sellers."