New developments e-commerce VAT Europe law entry - It is July 1, 2021 and changes in e-commerce VAT in Europe have just come into force. All those who sell their products online within the European Union (EU) have to know very well what these developments are.

New developments e-commerce VAT Europe law entry

2 are the main variations that apply to the tax model of online sales in Europe. And this is how they are explained on the website of the Tax Agency:

1. New single EU-wide threshold: existing thresholds for distance sales of goods to buyers from other EU Member States (35,000 or 100,000 euros, depending on the Member State) will be abolished and replaced by a new threshold of 10,000 euros for the whole of the European Union. Below this threshold, Spanish VAT regulations can continue to apply to cross-border sales. If sales exceed this threshold, you will be obliged to pay VAT in the Member State where your buyers are located. But you can easily register at the One-Stop Shop (OSS), where you can declare and pay VAT due in other Member States.

2. End of import VAT exemption: VAT exemption will be eliminated for the import of goods whose value does not exceed 22 euros. Consequently, all goods imported into the EU will be subject to VAT. The Single Import Window (IOSS) is created to facilitate and simplify the declaration and payment of VAT on distance sales of goods imported into the EU whose value does not exceed 150 euros. If you register with IOSS, your customers will appreciate that the price they pay represents the final price, including VAT, with no additional fees or charges.

New developments e-commerce VAT Europe law entry

If you do not register with the OSS, VAT will be paid by your customer when importing the goods into the EU. Postal operators or courier companies may charge the customer an additional dispatch fee to collect this VAT and carry out the necessary formalities at the time of importation of the goods. “As EU customers are used to prices including VAT, the payment of additional fees at the time of import could cause the customer to reject the package in question”, warn the Tax Agency

One concept stands out among all these new e-commerce tax developments in Europe: the Single Window (OSS). It will be a new, unique, electronic portal from which online sellers will be able to comply with their tax obligations. OSS, they explain, is an electronic system that simplifies VAT obligations for sellers of goods and service providers to consumers across the EU by up to 95%.

It consists of three optional schemes that simplify the formal VAT obligations for entrepreneurs or professionals who deliver goods and/or provide services to final consumers throughout the EU, since it allows them not to have to identify themselves and register in each Member State of consumption, but to be able to:

• Register electronically for VAT purposes in a single Member State for all distance sales of goods within the EU and for the provision of services by a company or professional to a consumer and therefore avoid registration for VAT purposes in several Member States.
• Declare and pay the VAT due on all these deliveries of goods and services in a single quarterly electronic declaration.
• Work with the tax authorities of your own Member State and in your own language, even if your sales are cross-border.

The next thing, logically, is to know what are these new special regimes that must be taken into account for the payment of this digital VAT on online sales in the European Union. In the Tax Agency explain who can benefit from each regime and what operations there is option to declare.

This scheme may be applied to employers or professionals not established in the Community who provide services to persons who do not have the status of an employer or professional, acting as such, and who are established in the Community.

New developments e-commerce VAT Europe law entry

Even if that taxable person, although not established, is registered or obliged to register for VAT purposes in one of the Member States in respect of services other than business-to-consumer services, he may benefit from the scheme outside the Union in respect of business-to-consumer services.

The special arrangements shall apply to all supplies of services which are to be understood as being made in the Community.

Employers or professionals who carry out the operations covered by the scheme may be eligible, whether or not they are established in the Community. However, the transactions to be reported under the scheme vary depending on whether the taxable person is established in the Community or not. In particular:

Where the electronic interface also makes direct sales of its own goods or services, it shall also include them in the Union regime or in the external Union regime as appropriate.

New developments e-commerce VAT Europe law entry

This scheme may be applied to entrepreneurs or professionals, established or not in the Community, who make distance sales of goods imported from third countries or territories in consignments the intrinsic value of which does not exceed EUR 150, with the exception of products subject to excise duty.

Any entrepreneur or professional who carries out operations that may qualify for one of the Single Window schemes may request registration at any time by submitting Form 035 electronically.

Those who are not already registered in the Single Miniventanilla (MOSS) and want to register in the Single Window (OSS) with effect from the beginning of the regime planned for July 1, 2021, may submit the form 035 of registration during the second quarter of 2021.

In order to benefit from several of these special schemes, the employer or professional must submit a form 035 for each of the schemes in which he wishes to register.

New developments e-commerce VAT Europe law entry: When the electronic submission is made by duly authorized representatives or social collaborators, they will be the ones who must have their electronic certificate. In the case of entrepreneurs or professionals who wish to benefit from the import regime through an intermediary, form 035 must be submitted by the intermediary and it will be the latter who must have his electronic certificate.

Regime outside the Union, and Scheme of the Union: as a general rule, the special regime will start to be applied from the first day of the quarter following that in which the entrepreneur or professional filed with the State Tax Administration, the declaration of the start of their operations included in one of these 2 special regimes of the Single Window.

New developments e-commerce VAT Europe law entry: However, the scheme shall apply from the date of commencement of operations, provided that the employer or professional submits the declaration of commencement (035) no later than the tenth day of the month following the date of commencement of operations and is stated in the 'Notification of prior operations' section of that declaration.

Import arrangements: the special arrangements shall begin to apply from the day on which the operator or professional or, where appropriate, the intermediary acting on his behalf, has been assigned the number of the operator for the purposes of the import arrangements (NIOSS), beginning with the letters IM.

Important regarding all the news about VAT on electronic commerce in the EU that have just entered into force on July 1, 2021 is to know the obligations that self-employed people have in the Single Window. They are referred to in this information document.

New developments e-commerce VAT Europe law entry