European Union VAT On E-Commerce (VOEC) – Sellers Established Inside EU

Effective July 1, 2021, the following changes to VAT and reporting of intra-EU distance sales will be introduced in the European Union (EU):

Distance Selling Thresholds

Distance selling thresholds will be replaced by a general tax at destination principle for all e-commerce supplies of goods (VAT is due in the destination EU country). Due to the tax at destination principle, you may be required to obtain a VAT registration number in each EU Member State where you perform distance sales.

Union One-Stop Shop (OSS)

To reduce the administrative burden of obtaining and managing up to 27 EU VAT registration numbers, the EU has created a One Stop Shop (OSS) solution. When opting in for the Union One-Stop-Shop, you will report all EU distance sales through a single VAT return within your country of establishment.

An overview of all EU Member state OSS portals and contact details for each country can be found here. Note that if you store inventory in any EU Member state, you will still be subject to local VAT registration requirements as all local supplies and business-to-business sales remain taxable and reportable in line with the current VAT rules.

To evaluate the impact of OSS filings on your VAT reporting, we suggest you reach out to your tax advisor. In general, you will submit your VAT filing in your home country, your OSS filing to report VAT on EU distance sales and VAT filings in any country inventory is stored.

Official guidance on OSS is available from the EU commission here.

Margin Scheme

When you sell products under the margin scheme, you may be required to compute and apply VAT on the profit margin only (Profit margin usually relates to the difference between the price at which you purchased originally the goods and the sale price to your buyer).

The margin scheme can apply to the sale of:

  1. Second-hand goods;
  2. Works of art;
  3. Antiques; and
  4. Collectors‘ items.

If you operate under the second-hand margin scheme, when you sell these goods on AbeBooks, and AbeBooks has a VAT collection obligation, AbeBooks is not legally entitled to apply the margin scheme and therefore, we will compute VAT on the full price at the appropriate VAT rate.

Please note that according to the UK and EU VAT on E-commerce legislation, AbeBooks may be required to collect and remit VAT on your sale, if your buyer is an individual consumer established in the UK, or in the EU, and 1) you are shipping the goods from outside the UK or the EU, respectively and 2) the value of the shipment is up to £135 or €150 respectively.

Micro-Business Exemption

The EU e-commerce VAT legislation has an exemption for small enterprises (micro-business exemption) and enables you to charge VAT in the EU member state where you have established your business if the following conditions are met:

  • You do not have fixed establishments in other EU Member states;
  • You do not exceed the EU distance sales threshold of €10,000 for sales delivered from your home country on an annual basis.

Micro-businesses will be able to report VAT on their sales through a single VAT return in their country of establishment.

Please note all above changes do not alter your VAT registration obligations. If you need help with VAT Registration and filing in the EU, we recommend consulting with a tax advisor.


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