From Thursday 1 July 2021, major changes are coming to VAT payable by traders selling into the EU and within the EU’s trading bloc of 27 member countries.
One key change affecting e-commerce in particular is that items imported into the EU with a value less than €22 (£15) will no longer be exempt from VAT.
This measure means that all goods sent directly from GB to consumers in the EU, both via online marketplaces and sales made directly, will be subject to the local rate of VAT in the buyer’s country.
What businesses can do
To ease the burden, the EU is allowing businesses selling into the EU, including from Great Britain, to handle these new import VAT requirements via its new Import One Stop Shop (IOSS) scheme.
For businesses trading within the EU, there is the One Stop Shop (OSS) scheme.
Legal entity needed
To report EU VAT via these schemes, GB e-commerce firms will need to set up a legal entity in an EU country or get an authorised fiscal representative in that country.
Kevin Shakespeare, director of the Academy at the Institute of Export & International Trade, commented:
“For reporting of EU Value Added Tax via OSS and IOSS, e-commerce firms will need to set up a legal entity in an EU country or get an authorised fiscal representative in that country.
“If GB traders don’t register, their ability to provide e-commerce to the EU will be severely impacted from 1 July.”
The Institute of Export & International Trade is helping GB e-commerce traders take advantage of these schemes, smoothing any complexities.
This support ranges from sessions with our renowned Technical Helpdesk through to full consultancy to handle the necessary administration of registering in the EU.
See here for the following services:
1. Technical Helpdesk
Start your VAT journey with advice from our Technical Helpdesk.
Not an IOE&IT Business Member? Join here.
2. Training and consultancy
If your VAT situation is more complex, our VAT training and consultancy packages will ensure you maintain and grow your business with the EU.
3. Registration service
IOE&IT is offering a fixed-price registration and representation service, allowing traders to register in the EU without complications, at a preferential rate to IOE&IT members.