COVID-19. The EU proposes a postponement in the application of measures on VAT for e-commerce.

The European Commission has proposed delaying the implementation of the measures established in the "VAT on e-commerce package" until July 1, 2021. These measures were originally scheduled to come into effect on January 1, 2021. The regulation sets the threshold for VAT in the destination country at €10,000, compared to the previous threshold of €35,000, for example, in Spain. At the same time, the system allowing businesses to avoid registering and identifying themselves in each country where goods are consumed is being expanded.

The VAT regulations relating to electronic commerce transactions of goods (and, in general, to distance selling) are going to be substantially modified in application of Directives 2017/2455 and 2019/1995. The application of these rules in the Member States was initially planned for 1 January 2021.

However, the new provisions require the implementation of management and control procedures, not only by the operators concerned, but particularly by the Member States and, in the current situation caused by COVID-19, not all States seem to be in a position to address an adaptation to the new rules in a timely manner.

For this reason, the European Commission has proposed delaying until July 1, 2021 the application of the measures set out in the "VAT package for e-commerce", which was scheduled to come into force on January 1, 2021.

The regulation sets the threshold at €10,000 above which taxes will be levied in the destination country, compared to the previous threshold of €35,000, for example, in Spain. At the same time, the system allowing businesses to operate without having to register and identify themselves in each country where they consume goods is being expanded.

From 2021, online platforms will be responsible for collecting and remitting VAT on these sales. This regulation aims to prevent fraud related to the importation of goods by European consumers and to improve competition between businesses within the European Union and those outside the EU that previously did not charge VAT.

You can contact this professional office for any questions or clarifications you may have.

Warm regards,

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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.

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