The global economy and new technologies have brought huge opportunities in trade, especially for electronic interfaces such as online marketplaces or platform. To keep the pace with new trends brought by e-commerce, the VAT rules are changing to create a simpler to use and fairer environment for VAT.
You can play your part in keeping cross-border trade flowing smoothly by preparing early for quick and easy registration for VAT in the EU to fulfil your VAT obligations in the EU.
An electronic interface (EI) should be understood as a broad concept. An EI could include a website, portal, gateway, marketplace, platform, application program interface (API), etc.
Starting 1 July 2021, electronic interfaces such as online marketplaces/platforms will have new roles for VAT purposes in the EU:
You are considered a deemed supplier if you facilitate:
But help is at hand! To declare and pay the VAT due in other Member States, online marketplaces/platforms will be able to easily register in a special electronic portal called the One Stop Shop (OSS).
The electronic interface facilitating the sale will not become a deemed supplier, for the following transactions:
The below figure can help you to understand when you will be considered a deemed supplier for VAT.
The result of the above-described deemed supplier model is that the electronic interface is treated for VAT purposes as if it is the actual supplier of the goods and will be liable to account for VAT on these sales. In other words, the electronic interface facilitating the sale is considered to have received and supplied the goods. This means that the sale from the supplier (the so-called underlying supplier) selling goods via an electronic interface to the final consumer is split into two supplies, as shown on the below figure.
Online marketplaces/platforms will need to keep records for the transactions they facilitate, irrespective if they become deemed suppliers or not. Such records should be kept for 10 years and made available electronically on request by Member State(s).
The below figure presents in a schematic way the reporting obligations of different electronic interfaces.
For further information and in particular regarding the information that needs to be kept, please refer to the Explanatory Notes.
If so, see our dedicated pages to learn more about what the OSS and IOSS tools are for, how they work, who is affected, how to register with them and what you need to do when you start using them.
The new rules will:
Check out the Resources page.