EU needs a swift and harmonized approach on the deferral of VAT E-commerce Package

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On 8 May, the European Commission proposed to defer by 6 months the application date of the EU VAT E-commerce Package, which was adopted in December 2017. Ecommerce Europe has always been a strong advocate of the VAT E-commerce Package and its measures. However, considering the fact that the COVID-19 pandemic led to strict lockdown measures and practical difficulties for both businesses and EU member states, Ecommerce Europe fully understands the reason why the European Commission decided to postpone its entry into application to 1 July 2021. Hence, the revised deadline of 1 July 2021 represents a good compromise solution, leaving Member States and e-commerce companies enough time to prepare whilst minimizing any VAT losses for the EU countries’ budgets.

In this light, Ecommerce Europe has called, by means of a letter, on the Croatian Presidency, the European Commission and the EU Member States to prioritize this deferral proposal towards a swift adoption in Council in order to provide essential legal certainty to all business stakeholders involved. Legal certainty about the start date of these important VAT changes is vital for impacted businesses to progress the necessary implementation works and IT built. It is also crucially important for the communication towards the many small and medium sized businesses who are selling online, whether through various marketplaces or otherwise.

Furthermore, in order to avoid fragmentation of the Single Market, it is of utmost importance to avoid any unilateral measures in anticipation of the new rules coming into force. Such unilateral measures would not only put a disproportionate implementation burden on businesses but would also create trade obstacles and ultimately jeopardize the EU Single Market and the important measures that the VAT reform will introduce.

Business requires legal certainty and consistency across the EU, which is key for the proper functioning of the EU Single Market and essential to foster future growth and jobs in the EU, especially in a post-COVID recovery era.

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