NEW EU VAT RULES FOR E-COMMERCE – COMING JULY 2021!

From 1^st July 2021, there will be new VAT rules being introduced across the EU for e-commerce businesses i.e. simplifying the administration for businesses that sell goods online or run an online marketplace! They are also focused clearly at ensuring that EU consumers are protected from any ‘hidden’ or ‘unexpected’ costs when buying goods or services online

The changes to the VAT rules are also aimed at ensuring a more level ‘playing field’ between both
EU businesses and online businesses from outside the EU.

In summary the changes are expected to ensure the following:

1. that VAT is paid where goods are being ‘consumed’ or services being paid for are ‘provided’
2. that a uniform VAT regime is created for cross-border supplies of goods AND services
3. provide ALL businesses trading across the EU with a much simpler system to both declare
   (or report) AND pay their VAT in the EU
4. introduce a level ‘playing field’ between EU businesses and non-EU businesses (now
   including the UK)

The main benefits from the introduction of the new VAT system for businesses and consumers are
varied

• Consumers will be able to buy goods online from suppliers (whether based inside or outside the EU) knowing the VAT rate will always be the same as for their home country – they are protected from any ‘hidden’ or ‘unexpected’ costs when buying online
• Businesses will be able to grow much easier across EU borders without having to register for VAT in multiple EU jurisdictions – hugely simplifying VAT related administration and minimising VAT issues
• Tax authorities will obtain more VAT revenues from ALL EU and non EU businesses – with less exceptions and more simply and easily

See our summary of the changes and new procedures below!

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