New VAT rules for cross-border supplies by e-commerce channel

published on 29 September 2021 | reading time approx. 2 minutes

As of 1 July 2021, the new VAT regulations will be in force with reference to so-called "distance sales" and the testing of the pre-filled VAT return has begun. The main novelty is represented by the updating and unification to Euro 10,000.00 of the monetary threshold of sales on the basis of which the obligation of identification arises for merchants selling to intra-EU consumers through online channels, unless of course the option to tax in the Member State of destination even if the new threshold value is not reached.

E-commerce VAT news

Directive No. 2017/2455/EU and Directive 2019/1995/EU brought about changes to the VAT rules with regard to cross-border trade in respect of sales made through e-commerce and directed towards final consumers (so-called “B2C”).

The main changes in force as of 1 July 2021 are outlined below:

a) with the aim of simplification, the e-commerce package was approved, containing the above-mentioned directives, some EU regulations providing for a centralised and digitalised VAT settlement system and covering, in addition to electronic services already participating in the Moss scheme: intra-EU distance sales of goods, distance sales of goods imported from third territories or third countries, domestic supplies of goods facilitated by trading platforms, supplies of services by taxable persons not established within the European Union or by taxable persons established within the European Union but not in the member state of consumption.

 
b) as a consequence of point a), new special VAT regimes have been introduced, to which operators may adhere to on an optional basis, and relating to: services rendered by non-EU persons (the so-called “non-EU OSS scheme”), services rendered by EU persons for intra-Community distance sales of goods and domestic supplies of goods facilitated by platforms (the so-called “EU OSS scheme”), the sale through e-commerce channels of goods imported from third territories or third countries (the so-called “Ioss import scheme”).

 
c) the new threshold for intra-Community trade has been updated to Euro 10,000.00, which now becomes the same for all EU Member States, unless the supplier has opted for taxability in the Member State of destination if he has not exceeded that threshold, to be calculated with reference to the previous or current year.
Therefore Inland Revenue, identification in all EU Member States of destination is not necessary if one of the above-mentioned regimes (Moss, Oss or Ioss) is adopted.
 

Pre-filled VAT return

With reference to the transactions carried out as from 1 July 2021, the will produce the draft VAT registers and periodic VAT returns so that taxpayers can be exempted from manual compilation. The pre-filled annual VAT return, on the other hand, will become fully operational on 1 January 2022. The pre-filled VAT returns, together with the data present in the Tax Registry, can therefore be downloaded by taxpayers in the reserved area of the Inland Revenue website.
   

Data to be indicated

VAT returns for Oss and Ioss must include supplies of services and distance sales of goods made to private customers in each Member State of sale. In the case of OSS declarations, for example, it is necessary to indicate the person carrying out the transactions in terms of VAT number, the reference period of the transactions carried out, whether it is an original declaration or a supplementary declaration, et cetera.

 
In addition, the subject of the transaction must be specified with: the country code of the Member State of destination of the goods and/or services, the place of departure, the net amount of VAT broken down by rates.
Finally, the VAT rates of the Member State of consumption and the amount of tax due must be indicated.
 

Payment obligations

When submitting the return, the taxpayer based in Italy must pay the amount resulting from the OSS or Ioss return, as the case may be, through the use of the unique reference number generated by the system; alternatively, the payment of the taxes due will be mandatory within the deadline for submitting the return (no later than the end of the month following the quarter or month of reference).

 
The payment of taxes is completed when the bank account of the Member State of identification is credited; in case of wrong payment, the tax authorities will send a reminder for payment through electronic channels.
Failure to pay taxes may result in the exclusion or disqualification of the liable party, unless the amounts due are less than Euro 100.00 for each reporting period.
   

New in online sales via marketplaces

For imports of a value not exceeding Euro 150.00 in connection with sales through a marketplace, the marketplace will be considered a seller for VAT purposes and will therefore be required to fulfil all VAT reporting and settlement obligations. Similarly, in the case of intra-EU sales made by a non-EU seller through a marketplace (such as Amazon FBA), the marketplace will be considered a seller for VAT purposes.