The European Union (EU) has introduced reforms to the value added tax (VAT) rules that will affect sellers that sell through online marketplaces, starting July 1, 2021. The new deemed supply rules affect online marketplaces (referred to as an "electronic interfaces" in the EU VAT law) that facilitate certain sales, including:
- Sales of any value by a non-EU seller to a consumer within the EU (including domestic sales or intra-EU remote or distance sales)
- Distance sales of imported goods by both EU and non-EU sellers to consumers of consignments not exceeding €150.
When the deemed supply rules apply, a sale between a seller and a customer is treated as two transactions for VAT purposes, as follows:
- The seller is deemed to have sold the goods to the marketplace as a business-to-business supply, and no EU VAT is due on this transaction
- The marketplace is deemed to have sold the goods to the consumer as a business-to-consumer supply, and the marketplace is responsible for collecting the VAT due on the sale from the consumer.
For further details, see a recent alert from KPMG's U.S. member firm, "EU: Review of Deemed Supply Rules".
For more information, contact your KPMG advisor.
Information is current to May 10, 2021. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500