World e-Com Blog|EN
Online export

changes in EU tax law

On July 1, 2021, new VAT rules for online business-to-consumer (B2C) sales of goods and services will take effect in the European Union, reflecting the growth of digital and cross-border trade occurring online and often on large trading platforms.

For tax authorities, it is clear that the original EU indirect tax rules have not kept pace with the e-commerce boom. As a result, local businesses have faced unfair competition from foreign sellers who do not always charge VAT on the goods they sell to EU consumers. The EU estimates that €5 billion in VAT is lost annually in cross-border digital sales of goods due to the complexity of the rules and their non-compliance.

To finally end the unfair tax environment and create a strong Internal Market, the EU is introducing changes that are designed to simplify VAT compliance for e-commerce companies and ensure a level playing field for EU sellers and traders based abroad.

First, the new rules are designed to ensure that, as of July 1, 2021, VAT is always paid where consumers are located, which should put an end to

disadvantageous conditions from which local businesses have suffered for years. Secondly, a number of simplifications will be applied to reduce the administrative burden on businesses. Finally, online marketplaces will play a more active role in charging and collecting VAT from consumers located within the EU under certain scenarios.

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