New EU VAT legislation was introduced for EU e-commerce on 1 July 2021.
There are three major changes:
1. No more threshold amounts
The threshold amounts for intra-EU distance sales of goods per individual EU country have been abolished. There is now one joint threshold of €10,000 which applies to all intra-EU distance sales of goods together with the sale of digital services to consumers in the EU.
2. Import VAT exemption less than €22 abolished
The VAT exemption for import VAT on shipments with a value less than €22 has been abolished. Shipments worth less than €150 remain exempt from import duties.
When you sell products from outside the EU to customers who do not file a VAT return, the price must include VAT at the applicable rate for the EU country where the goods are delivered. For example, when supplying products from China via your online shop directly to consumers in Belgium, you must pay Belgian VAT on this delivery. You can use the Import One-Stop Shop (IOSS) to collect, declare and pay the VAT.
3. Platforms with active role pay VAT
An entrepreneur is responsible for the VAT payment on products they sell to consumers via a platform. With the new VAT rules, the platforms are responsible for this VAT payment if the platform plays an ‘active role’. An active role is more than just bringing supply and demand together digitally.