New guidelines on distance selling VAT rules? | KPMG | GLOBAL

New guidelines on distance selling VAT rules?

New guidelines on distance selling VAT rules?

The distance selling rules apply when a company sells and transports goods to private customers in other EU member states (for example via a webshop).

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A company doing so is obliged to register for VAT purposes in the EU Member State of arrival of goods as soon as he exceeds the distance selling threshold (in most EU countries 35.000 EUR or 100.000 EUR). As long as the distance selling threshold is not exceeded, the supplier has the option to charge the applicable VAT rate of his own EU Member State (and does not require a foreign VAT registration), or to register for VAT purposes in the EU Member State of arrival of goods and to charge local VAT.

In this context, both the UK and Belgium asked the VAT committee how to understand ‘dispatched or transported by or on behalf of the supplier’. Very recently, the VAT committee is of the opinion that the supplier shall be regarded as having intervened directly or indirectly in the transport of the goods if:

  • The transport is subcontracted by the supplier to a third party who delivers the goods to the customer;
  • The transport of the goods is provided by a third party but the supplier bears totally or partially the responsibility for the delivery of the goods to the customer;
  • The supplier invoices and collects the transport fees from the customer and further remits them to a third party that will arrange the dispatch or transport of the goods;
  • The supplier actively promotes the delivery services of a third party to the customer, puts the customer and the third party in contact and provides to the third party the information needed for the delivery of the goods.

The opinion of the EU VAT Committee has been confirmed in a recently published decision of the Belgian VAT authorities. It does no longer matter who carries out the transport of the goods. In any cases where the supplier carries out the transport of the goods himself or outsources the transport to a third party, the transport or dispatch of the goods will always be regarded as organized by or on behalf of the supplier, allowing Member States to collect VAT in the country of consumption.

For questions or more explanation, don't hestitate to get in touch with our specialists.

 

Gladys Cristiaensen
VAT Manager
+32 38 21 1728
gcristiaensen@kpmg.com

© 2017 KPMG Central Services, a Belgian Economic Interest Grouping ("ESV/GIE") and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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