VAT Reform for B2C Distance Selling and E-Commerce in 2021


As of 1st July 2021, VAT rules applicable to B2C Distance Selling and more generally to BtoC E-commerce will be substantially amended. The package on VAT rules for E-commerce was adopted on December 2017 by the Council of the European Union and aims to:

  • Simplify the VAT administrative procedures burdening businesses;
  • Fight against VAT fraud more effectively;
  • Ensure a fair competition between UE and non-UE businesses.

Who is affected by the VAT reform?

All EU and non-EU businesses selling goods and services online to European consumers will be affected by the VAT reform, regardless of the sales channel they use:

  • Dedicated websites;
  • Marketplaces (Amazon, Ebay, AliExpress, Fnac, Darty, CDiscount, etc…);
  • Social Networks (Facebook, Instagram, Snapchat, Twitter, etc…).

Drop-shipping players, who have so far been relatively unconcerned, will be particularly impacted by the changes as of 1st July 2021.

What are the impacts of the VAT reform?

The reform introduces 3 optional special schemes (OSS-EU, OSS-HUE and iOSS) which will allow companies to centralize their VAT reporting in a single EU country, via a new VAT number specific to each OSS.

Please note: the conditions of access to OSS are strictly regulated and specific to each scheme. In many cases it will not be possible to avoid a traditional VAT return. Consequently, a company may have several VAT returns to file in the same country, using several VAT numbers for the same country.

In addition, due to the abolition of the exemption from customs declaration on importation into the EU for consignments worth less than 22 euros, drop-shipping players must now review their procurement process from outside the EU.

E-commerce players need to prepare for the VAT reform

The new rules will come into force from 1st July 2021 in all the EU Member States.

This means that sellers only have a few months left to determine where and how to declare each type of sale.

In fact, it will now be necessary to distinguish sales according to:

  • the value of the goods;
  • the origin of the goods (EU or non-EU);
  • the sales channel used (Website, Market Places, social networks…);
  • the use or not of a storage place;
  • and the person in charge of transport.

Thanks to its dedicated service "VAT AUDIT E-COMMERCE 2021", ASD Group helps you to determine what your VAT obligations will be as of July 1st, 2021.

In addition, in order to benefit from the special schemes from 1st July 2021, it will be necessary to obtain the VAT numbers specific to OSS’s beforehand.

ASD Group can handle the necessary steps for you to obtain the VAT numbers specific to OSS’s.

You will also have to adapt your IT tool to be able to comply with the new OSS VAT return procedures.

Customs clearance of imported goods

As of 1st July 2021, all goods WITHOUT EXCEPTIONS will require a customs declaration at the time of import into the EU.

However, imported goods with a value of less than 150 will be eligible for exemption from import VAT, provided that sales are declared via IOSS and that the seller’s iOSS VAT number appears in the import declaration.

What can ASD Group do for you before the VAT reform goes into effect in 2021?

Assist you to adapt to the new rules:

  • By providing you with exclusive, reliable, up-to-date information, thanks to the in-depth analysis of the new regulations provided by our tax experts. Subscribe to our newsletter to keep up to date with the latest developments.
  • By determining what your VAT obligations will be as of 1st July 2021, thanks to our dedicated service "VAT AUDIT E-COMMERCE 2021".
  • By taking the necessary steps for you to use OSS’s.
  • Providing you with IT tools to facilitate the management of your sales.

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