New EU rules for VAT on e-commerce on 1 July 2021

If you are based in the Netherlands and you sell products or services online to consumers in other EU countries, chances are that you will become subject to new VAT rules with effect from 1 July. We have outlined the main changes for you below.

Impactful changes

The new EU Directive for VAT on e-commerce will enter into force on 1 July 2021. The main purpose of the new Directive is to simplify the VAT regime and to prevent VAT fraud (involving small consignments). The new Directive will be extremely impactful for your business operations in the Netherlands.

New threshold for distance sales and one-stop shop

The local thresholds for distance sales will be abolished as of 1 July and replaced by a new EU-wide threshold of € 10,000.

If your distance sales in a year exceed € 10,000, you will owe VAT in your customer’s EU country of residence. If your distance sales are below € 10,000, they will remain subject to Dutch VAT.

A one-stop-shop (OSS) system will be introduced. Online sellers can register in one EU country and their registration will be valid for the declaration and payment of VAT on all distance sales of goods and services to customers within the EU. You can register for OSS as early as in April.

No more VAT exemption for small consignments

As it stands, imported consignments in the EU that are worth less than € 22 are exempt from VAT. This exemption will be removed. All imported goods will be subject to import VAT in principle from 1 July onwards irrespective of their value.

If you import goods from non-EU countries with a value of € 150 or less, you may qualify for an import exemption. The Import One-Stop Shop (IOSS) has been created to simplify the declaration and payment of VAT.

Special provisions for deemed suppliers

New rules will also be introduced for platforms, such as bol.com, Amazon, AliExpress, that facilitate the sale of goods to consumers.

Action required before 1 July?

If you sell goods and/or services to consumers in other EU countries, it would be advisable for you to check what adjustments need to be made so that you will not be taken by surprise later.

You might have to make changes to your existing procedures and ERP systems. We also recommend that you explore your options for registering with OSS and/or IOSS, so as to simplify your VAT payments in the different EU countries from 1 July onwards.

Advisory services

We would be happy to continue preparing you VAT return for you to make sure that you meet the new rules.

If you are looking for personalised advice from an accon■avm adviser, please contact us on international@acconavm.nl. Our specialists know all the ins and outs of your sector and can help you avoid unwelcome surprises after 1 July. Together we can grow your business.