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EU VAT Changes 2021

The cross-border e-commerce VAT in the European Union has been changed in 2021. This new measure will allow businesses from all over Europe to have a much easier and simple process for selling cross-borders with other EU countries, promoting competitiveness (up until now, companies with clients from multiple countries in the EU had to register and fill all of the paperwork in each of them).

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The planned beginning to start being implemented was set to January 1st 2021, but, because of the impact of covid-19 all the intervenients in the e-commerce chain will be affected, from the online sellers inside and outside the EU, the post offices, couriers, tax administrators and even, the customers.

It’s also worth noting that it will boost the sales of European companies, as external purchases will get less attractive to European consumers, with the products being stopped in the customs when entering a European country and having to pay VAT on the consumer’s country.


What do the new rules say?

As of July 1st 2021, cross-border e-commerce sellers will be required to charge the VAT rate of the buyer’s country of residence from their first sale, with the exemption of micro-businesses established in one EU country with sales no greater than €10.000 in each of the last two years.

Besides that, online sellers will only need to register in one EU member state to declare and pay VAT on all distance sales of goods and cross-border services to customers in the EU.

Finally, the VAT exemption on imports of under 22€ will no longer exist, meaning that all goods imported into the EU will be subject to VAT.

To further simplify the payment of VAT, companies should register on the Import One-Stop Shop (IOSS), a platform made specifically for this purpose.

Learn more about this change and its impact, on the EU website.

We also recommend you read how to adjust the tax settings for your Jumpseller store.