New rules for VAT on ecommerce

From 01 July new VAT on ecommerce rules are coming into effect which may affect those business who sell goods online to other EU countries or who provide certain services to other EU countries.

These changes will only impact on those businesses who sell to private consumers based in an EU country. If you are a business who only supplies to other VAT registered businesses, then these changes will not affect you.

One Stop Shop

From 01 July the Mini One Stop Shop (MOSS) system of VAT reporting is being extended to the One Stop Shop (OSS). The MOSS system of reporting covered supplies of telecommunications, broadcasting and electronically supplied (TBE) services to private consumers in other EU countries and these services will continue to be covered under the OSS scheme.

If a business who is providing distance sales of goods (supplies of goods to a private customer based in another EU country where the supplier is responsible for the delivery) then rather than register for and charge local VAT in every EU country where they make these supplies, they can instead register in just one EU country and report the VAT due on these sales.

This OSS system will also now apply to certain other supplies of services outside of TBE services. These include hosting of events, transportation services and catering services. The full list is available here

In the absence of the OSS system then every business who supplied €10,000 or more per annum of the above-mentioned goods/services would need to file VAT returns in each EU state where they had non-business customers.

OSS returns are required once a quarter and must be filed in addition to your domestic Irish VAT returns once you are registered.

Import One Stop Shop

The other major change from 01 July is the introduction of an Import One Stop Shop (IOSS).

VAT will now be due on all goods imported into the EU regardless of value. Up to now there had been relief for low value goods worth less than €22.

The IOSS will allow businesses to report VAT on distance sales of low value goods imported from outside of the EU. Low value goods are goods imported in consignments that do not exceed an intrinsic value of €150. Goods that are subject to excise duty are excluded.

If you register for the IOSS scheme then rather than be charged VAT at the point of import you can charge VAT to the customer at the point of sale.

VAT on these sales must then be declared on a monthly IOSS return.

 

 

Date published 1 Jul 2021 | Last updated 1 Jul 2021

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.