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.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor 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 on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.