Get Ready for the 2021 EU E-Commerce VAT Package

Download our infographic to understand the upcoming changes.

If you’re an EU business with B2C sales in other EU Member States or based outside the EU with B2C sales to the EU, 1 July 2021 will bring significant change.

The EU VAT e-Commerce Package aims to simplify cross-border trade and ensure VAT is charged correctly on cross-border B2C sales.

The change to the Distance Selling threshold means that VAT will be immediately due in the Member State of consumption and this could lead to a requirement for several additional VAT registrations. This will add cost and complexity to businesses and so the package introduces a One Stop Shop (OSS) to ease the burden.

OSS has many benefits but it’s not simple.

It’s important that companies prepare and make informed decisions now as to whether or not OSS is right for their business.

Our One Stop Shop infographic will help you understand the key changes the new EU VAT e-Commerce Package will bring including:

·       Union OSS, Non-Union OSS and Import OSS

·       OSS record-keeping requirements

·       Excise goods eligibility

·       Place of supply rules

·       Changes to distance selling thresholds

·       Marketplace liability

·       Low value consignment relief  

·       How to prepare for OSS

·       The consequences of OSS noncompliance

As part of the changes, it’s important to understand which OSS applies to your business to ensure VAT compliance. Requirements vary for EU and non-EU businesses, for sales D2C or via an online marketplace depending on the final steps of the supply chain.

The three variations of OSS are:

·       Union OSS

·       Non-Union OSS

·       Import OSS (IOSS)

As OSS isn’t currently compulsory it’s better to understand internal timeframes and implement OSS when your business is ready, rather than try and rush to meet the 1 July 2021 introduction date.

The main choice businesses with total intra-community sales of >€10,000 need to make is whether to use OSS or register in every Member State where they trade.

Download our infographic to understand the upcoming changes and how they could affect your business.

Sovos can help you prepare for OSS

Implementing the changes required to comply with the 2021 EU e-Commerce VAT Package into your ERP system could take significant time and resources. Sovos can help ease the tax burden and help you prepare for and understand the right solution for your business.

Our large advisory team can help you navigate the complexities of modern VAT compliance.