New EU e-commerce rules bring in €1.9 billion within six months

The EU’s updated VAT rules for online sellers brought in €1.9 billion in revenues for Member States in just the first six months of implementation. Specifically, new VAT regulations governing imports of low value goods (worth less than  €150) have driven revenue growth. 

As of 1 July 2021, all goods imported into the EU are subject to VAT. Previously, goods worth less than €22 were exempt from import VAT. However, authorities say that goods were often undervalued to avoid VAT.

Authorities say EU Member States have collected an additional €690 million in additional revenues relating to parcels valued at less than €22.

A better way to manage online sales VAT

E-commerce sellers can now take advantage of a streamlined new VAT mechanism, the Import One Stop Shop (IOSS). The IOSS is a simpler and more cost effective way to manage VAT on the distance sale of imported low value goods.  

According to the European Commission, more than 8 000 traders have already registered for the IOSS.

Streamlining distance selling in Europe

Online retailers that sell goods already located within the EU can also benefit from the new VAT regulations. Specifically, the One Stop Shop (OSS) enables retailers to account for VAT on sales throughout the EU with a single consolidated VAT return. For many e-commerce stores, the new mechanism is a much simpler and more efficient way to manage their VAT.  

If you sell goods online to customers in Europe, you probably have VAT obligations. As the world’s VAT compliance and recovery experts, VAT IT will carefully assess your company’s entire value chain and customise a program that optimises compliance and maximises VAT recovery. Get in touch with VAT IT for a more effective end-to-end VAT solution.