VAT: EC proposals to support e-commerce and online | KPMG | UK

VAT: EC proposals to support e-commerce and online businesses in the EU

VAT: EC proposals to support e-commerce and online

The measures are aimed at allowing consumers and companies to buy and sell goods and services more easily online.

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The European Commission has unveiled its proposed new measures to support e-commerce and online businesses in the EU. These include a reduced rate for e-books and the extension of Mini One Stop Shop to the supply of goods. Most of these have been suggested before, most recently in the Commission’s Action Plan on VAT. The proposed start date for the equal treatment would be from when the change is agreed. For some of the threshold simplifications the proposed start date is 2018 and for the remainder 2021.

The measures are:

New VAT rules for sales of goods and services on-line

This essentially extends the existing Mini One Stop Shop (MOSS) registration and infrastructure to goods and proposes a combined single quarterly return for both goods and services supplied across the EU. The press release talks about reducing the burden of multiple registrations.

Simplifying VAT rules for micro-businesses and start-ups

This includes a proposal for a €10,000 per year threshold for e-services under which VAT can be accounted for where the supplying business is established. There is another proposed threshold of €100,000 under which only one piece of evidence for customer location is required to evidence where the customer is located (and where VAT is due). The thresholds do not appear to be per country but across all other Member States. Other proposed changes include simplifications such as a business only being audited where the business is located.

Action against VAT fraud from outside the EU

This includes the removal of the exemption for small imported consignments under €22, known in the UK as low value consignment relief.

  • The proposal on the new thresholds from January 2018 can be accessed here;
  • The proposal for the wider VAT changes and the removal of the exemption for small imports from January 2021 can be accessed here; and
  • The proposal to amend Regulation (EU) No 904/2010 on administrative cooperation and combating fraud in the field of value added tax required for the MOSS extension can be accessed here.

Equal rules for taxing e-books, e-newspapers and their printed equivalents

This is the much discussed proposal that would allow Member States to apply the same VAT rate to e-books as they do to printed matter. This will be optional for Member States. 

Each of the proposals were accompanied by some Commission working documents in the form of an Impact assessment and Executive summary. The Commission has also issued a number of other documents including a press release, factsheet, memo and Commission’s Digital Single Market page

 

For further information please contact :

Laura Gowland

Karen Killington

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