On Friday, 8 May, the European Commission has published a legislative proposal to postpone the implementation date of the VAT Ecommerce Package by 6 months, from 1 January 2021 to 1 July 2021. The decision from the Commission is most likely following the request from some EU countries to postpone the application date, due to the fact that their IT systems would not be ready by the end of this year, next to the obvious difficult situation caused by the COVID-19 outbreak, which also weighed in.
The proposal includes a postponement of the following elements of the VAT Ecommerce Package adopted in December 2017:
- The VAT One-Stop-Shop, whose aim is to allow all companies that sell goods to their customers online to deal with their VAT obligations in the EU through one easy-to-use online portal in their own language.
- The abolition of the import VAT exemption for small consignments (valued at under € 22) and the Import One-Stop-Shop VAT return.
- Rules on marketplaces deemed as suppliers in relation to VAT. As a reminder, these rules make online marketplaces responsible for ensuring VAT is collected on sales on their platforms that are made by companies in non-EU countries to EU consumers. This includes sales of goods already stored by non-EU companies in EU-based warehouses.
Both the European Parliament and the Council have been informed about the proposal, which will require adoption in Council by unanimity, according to the EU legislative procedure foreseen for VAT matters. Ecommerce Europe hopes for a swift adoption by the Council in order to provide essential legal certainty to all e-commerce players.
More information can be found on the European Commission’s website.