Distance selling VAT has changed a bit since Brexit. This means a Swiss seller selling into all EU jurisdictions would potentially need to register for VAT in all 27 EU Member States to account for the VAT on intra-EU distance sales. If you are selling less than 10,000 EUR in combined sales of goods and digital services between EU countries, or between Northern Ireland and EU countries, you will need to deselect the checkbox on the updated EU Distance Selling Threshold … We will inform you about the consequences for online retailers in time. The current thresholds will be abolished (see about an exception for small EU businesses below). For example, if you’re selling to someone in France, the transaction is subject to the 20% French VAT. By default, VAT on intra-EU distance sales will be charged at the rate of the country of arrival. For example, €100,000 for Germany and €35,000 for France. Distance Selling in Europe UPDATE: From 01.07.2021 a Europe-wide uniform delivery threshold of 10,000€ is planned. 1.1 Intra-community mail order Intra-Community sales will refer to BtoC sales where the goods are transported by the seller (or on their behalf) from one EU Member State to another EU Member State. Previously, this meant VAT only applied to intra-community distance sales if annual turnover was more than €35,000 (£31,000) for sales to most EU countries, or €100,000 (£86,000) per annum for Germany, the Netherlands and Luxembourg. The existing rules, which still apply to businesses established in the EU, will be abolished, as will the previous distance selling registration thresholds (to be replaced for EU businesses by a new EU-wide €10,000 threshold). For example, €35,000 in France. As we mentioned above, all distance selling thresholds will be removed and only one threshold will be in place of €10.000 which will take into consideration all sales within the EU territory excluding the seller’s country of establishment. Transport and coronavirus. However, from 1 July 2021 the distance selling thresholds have been abolished. EU is planning to introduce two ‘one stop shops ‘ to ensure an easier way to VAT compliance throughout EU. Up until now, once a certain selling threshold had been reached, EU-based businesses were required to register for VAT in the EU country that they were selling to. The abolition of the “distance sales threshold” and the creation of a unique and common threshold of EUR 10,000 throughout the EU up to which B2C EU cross-border supplies remain subject to the VAT rules of the Member State of dispatch, and above which supplies become subject to the VAT rules of the Member State of destination; Once over these limits within the same calendar year, it must apply for a number, see our EU VAT Registration briefing. This is called distance selling. With effect from 1 July 2021, the EU is removing the distance selling thresholds and in turn introducing new rules to prevent the need for multiple EU VAT registrations, however UK businesses will no longer be able to benefit from the distance selling thresholds from 1 January 2021, meaning a UK business selling goods to EU non-business customers must answer the question of what to do between 1 January … Distance selling thresholds have been withdrawn for EU businesses from 1 January 2021. The thresholds currently in place in the EU are abolished from 1 July 2021. No, under the new EU VAT rules for ecommerce, the distance selling thresholds will be abolished. Distance Selling Threshold Limits in Europe As part of the July 2021 VAT ecommerce reforms, the European Union (EU) replaced country-specific thresholds for collecting VAT with a single threshold of 10,000 EUR for all EU countries.By default, AvaTax assumes that you sell more than the new threshold and calculates VAT for transactions in EU countries. Effective 1 July 2021, a single EU-wide distance selling VAT registration threshold of EUR 10,000 will apply and replace … The current regime allows businesses that sell goods to consumers (B2C) from one EU country, to charge the VAT rate of the country of dispatch until defined sales thresholds are exceeded. Distance Selling Thresholds 2019 & 2021 . EU distance selling thresholds until July 2021 €100,000 per annum: Germany, the Netherlands, Luxembourg, UK (£70,000) during its Brexit transition period until 31 December 2020. From 1 July 2021. From July 2021 Distance Selling Thresholds will be withdrawn. Distance selling simplifications From 1 July 2021, an optional scheme is to be introduced covering the distance selling of goods with an intrinsic consignment value less than EUR 150. This is generally only available for sales from a sellers’ domestic stocks. Previously every country in the EU had its own distance selling threshold, meaning that sellers had to meticulously monitor how many sales they were making to each country. EU VAT e-commerce threshold Since July 1, 2021, the threshold for distance selling in Europe is €10,000 in annual revenue. If you sell more than 10.000,- EUR net in one year to other European countries, you have to register for VAT in the countries you sell to. Currently, to reduce the burden on small sellers, the EU operates a special VAT registration simplification for e-commerce, known as distance selling thresholds. However, the current thresholds of either €35,000 or €100,000 set by each EU member state (the UK uses £70,000) will be replaced with a single pan-European threshold of €10,000 (£8,818). Goods: Sales of goods to consumers were covered by the distance selling rules: if the total turnover of sales in a particular EU country was less than the local threshold (€35,000 or €100,000), UK VAT applied; or if the threshold had been exceeded, the seller had to register in that EU country and charge local VAT instead. Distance Selling Thresholds. The previous thresholds for distance sales of goods within the EU have been abolished and replaced by a new EU-wide threshold of 10,000 euros ($11,800). 1. Distance selling thresholds are currently either EUR 35,000 or EUR 100,000 depending on the country to which goods are delivered. Ending distance selling thresholds rules. For all other 24 members of the EU it is €35,000 per annum or local currency equivalent. EU to UK Distance Selling. These include: 1. This scheme will be available to both EU and third-country suppliers, including in NI and GB, selling goods direct to end customers in the EU. The distance selling thresholds set by the EU Member States remain unchanged on 1 January 2021 : However, due to the Brexit : BtoC sales between the European Union and the United Kingdom are no longer subject to the distance selling regime (see our dedicated FAQs for more information);BtoC sales between the EU and Northern Ireland remain subject to the distance selling … (So basically, this loophole is closing.) At the same time as withdrawing the distance selling thresholds, the EU is extending the single VAT return, OSS, to e-commerce cross-border distance selling of goods. This will replace the obligation to VAT register in every country where sellers are making sales to EU consumers from stocks in a single EU location – typically their home state. The first thing to mention is the introduction of a uniform EU revenue threshold for electronic online services (such as the music streaming service Spotify). This means that for cross-border sales within the EU, the business will pay VAT from the first sale. What you need to do. This scheme will be available to both EU and third-country suppliers, including in NI and GB, selling goods direct to end customers in the EU. On 1 July 2021 EU ecommerce VAT package will withdraw the distance selling thresholds. It seems distance sales will start following the destination principle; that is, you always apply the tax rate of the customer’s country. Hold the stocks in the EU to arrange the fulfilment of EU sales orders. These changes are applicable to merchants with existing stock in the EU which are sold cross-border from one EU country to another (for example: selling goods located in France to a shopper in Germany). Rules after 1 July 2021. If this business was selling goods to Austria which has a distance-selling threshold of €35,000.00, all the NET sales from UK, Germany or France would all connect towards the Austrian sales threshold.. From 1 July 2021, the European Union’s (EU) e-commerce reform will be introduced, which will include the withdrawal of the current VAT distance selling regime. As of 1 July 2021, the annual distance sales threshold will be removed. All distance sales of goods will be taxed in the EU MS of arrival. No more distance selling thresholds. However, the current thresholds of either €35,000 or €100,000 set by each EU member state (the UK uses £70,000) will be replaced with a single pan-European threshold of €10,000 (£8,818). It might be time to choose your key EU market and register for VAT there so you can store inventory and save on fulfilment costs. The European Commission intends to simplify VAT rules for e-commerce businesses by applying the principle of taxation at destination. The information given on this page only concerns selling to the final consumer (B2C), not to other businesses (B2B). 1. If you are selling more than 10,000 EUR in combined sales of goods and digital services between EU countries, no action is needed. E-commerce and off-premises selling offers many advantages, but it also entails certain obligations under EU rules. Why is this new exemption threshold being introduced? For EU based businesses – a new registration is being introduced for EU based businesses – OSS (One Stop Shop) from 1st July 2021, a single EU-wide threshold set at EUR10,000 will be introduced. These changes impact duty thresholds and tax filing processes for EU-based businesses. Distance Selling Thresholds Abolished. Also, as of July 1, 2021, the distance selling thresholds will be eliminated in favor of the introduction of a single threshold. Distance Selling – The principle of distance selling of B2C goods between EU member states and Northern Ireland remains unchanged. This … The new EU VAT rules have abolished these thresholds and have replaced them with a blanket threshold of €10,000 for every country. Any UK exporters using the EU Distance Selling rules to account for VAT on sales have seen that regime abolished meaning changes to the rules when selling products to members of the public in the EU. Below we have outlined some of the key changes which took effect from 1 January 2021 after the end of the Brexit transition period. Amazon sent an email about it. The OSS scheme can also be used by a third country business whose office is outside the EU and which does not have a permanent establishment in EU Member States. These thresholds vary across the EU from euro equivalent lows of €26,135 per annum in Romania to highs of €100,000 in Germany, Luxembourg and Netherlands. Currently, EU merchants have to register for VAT in other EU countries as soon as they reach a certain country-specific threshold. EU distance selling thresholds until June 2021: On July 1, these distance selling thresholds … There will no longer exist an annual distance selling threshold of However the distance selling thresholds appear to by changing (in July I think). Abolition of the existing distance selling rules for goods. Under existing rules, non-EU businesses that hold stock in the EU have been required to account for an charge VAT in various EU countries where distance selling thresholds have been breached. If a foreign company is selling below these thresholds, it does not need to VAT register. Starting 1 July 2021, EU-based businesses will need to charge VAT in the customer’s Member State, unless their turnover from cross-border selling remains below €10,000 within a calendar year. E-commerce, distance and off-premises selling. There is a pan EU VAT return for B2C intracommunity sales. This revenue includes sales that: cross borders to buyers in other EU … It must be noted that for extra-EU countries, including the UK, there is no threshold. What happens if you exceed the VAT threshold? EU place of supply/distance selling thresholds were removed on 1 July 2021. To combat these issues, the EU has legislated for some important VAT changes. You must provide certain information if you’re selling goods or services through digital TV, by mail order or by phone or text message. Reaching the annual threshold limit for distance selling leads to various VAT duties. That’s why reaching this limit should not be missed to avoid problems (and penalties) before they even happen. This means that cross-border sellers inside the EU will have to charge the VAT rate of the customer’s country of residence from their first sale and remit it … Update your Distance Selling Threshold setting if you sell less than … The principle of distance selling of B2C goods between EU member states and Northern Ireland remains unchanged. Before the transition, UK customers could purchase items anywhere in the EU without having to pay import duties. From 1 st July 2021, the distance selling thresholds as described above will be abolished and replaced by a single, pan-EU exemption threshold set at EUR10,000. Why is this new exemption threshold being introduced? It will reduce to only 10K Euros TOTAL for all of Europe. No More Distance Selling Thresholds. The extension of the Mini One Stop Shop (MOSS) to other B2C services and intra-community B2C distance sales of goods 2. As of July 2021, a Europe-wide VAT threshold for distance selling of EUR 10,000 will apply. If a business is VAT registered in the UK, Germany and France, and also has warehouses storing goods within those EU Member States. This and similar situations are the occasion for the introduction of new online trading regulation at the EU level. Historically, EU merchants would register for VAT in receiving countries after surpassing a country-specific sales threshold. For EU businesses, the current distance selling thresholds will … These selling thresholds disappear on July 1. From 1 st July 2021, the distance selling thresholds as described above will be abolished and replaced by a single, pan-EU exemption threshold set at EUR10,000. Distance selling. This will depend on the relevant Distance Selling thresholds. Distance selling simplifications From 1 July 2021, an optional scheme is to be introduced covering the distance selling of goods with an intrinsic consignment value less than EUR 150. Specifically, the changes are in relation to: 1. 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