VAT on e-commerce: New rules as of 1 July 2021

published on 18 May 2021 | reading time approx. 2 minutes

As of 1 July 2021, the amendments introduced to the VAT Directive 2006/112/EC will come into force, with the aim of simplifying the VAT obligations of EU taxable subjects engaged in “distance” sales of goods or supplies of services to final consumers subject to VAT in the Member State of consumption.

The current rules provide, for VAT taxable subjects engaged in cross-border trade with final consumers, for VAT to be paid in the State of destination of the goods, if the amount of sales made in a State is higher than specific yearly thresholds established by each Member State (from 35,000 to EUR 100,000 Euro depending on the EU country). If this threshold is not exceeded, VAT can be paid in the State of departure of the goods and therefore it is not necessary to be identified for VAT purposes in the State of destination of the goods in order to pay the tax.

From 1 July 2021, there will be a single minimum annual reference threshold for each EU Member State of 10,000 Euro (excluding VAT) above which the tax applies in the State of destination of the goods, from the date on which the threshold is exceeded. At the same time, two new special regimes are introduced, representing a centralised and digital European system for the payment of VAT, which in fact extends the scope of the current MOSS special scheme (reserved only for electronic, telecommunications and broadcasting services):

OSS (One Stop Shop) for distance sales of goods shipped from one Member State to final consumers in another Member State of the European Union and supplies of services to final consumers subject to VAT in the Member State of consumption;
IOSS (Import One-Stop Shop) for sales to final consumers of goods imported from third countries for a value not exceeding 150 Euro.

In order to join the new OSS/IOSS regimes, it is necessary to register on the website of the Tax Authority. Those currently registered under MOSS will be automatically registered for the new OSS from 1 July 2021.