Changes to EU VAT Rules From 1 July 2021

From July 1st 2021, business to customer sellers need to be aware of VAT reforms put in place by the European Union. Below is a quick summary of the most important changes to be aware of:

• All goods imported to the EU will now be subject to VAT regardless of value, due to the removal of the €22 VAT exception. 
• Implementation of a new electronic portal for businesses and electronic interfaces to use to comply with VAT e-commerce regulations called the Import One-Stop Shop (IOSS), to be used for distance sales of imported goods. 
• The IOSS allows VAT to be collected, declared and paid to tax authorities by suppliers and electroninc interfaces, rather than VAT being paid by the customer at the time the goods are imported into the EU. This means the buyer should not face any surprise fees on delivery, as they are charged at time of purchase.
• VAT payment is only applicable to goods worth less than €150 and purchased by a buyer within the EU.

To read about these changes in more detail, you can visit the official European Union VAT guidance page or see this IOSS factsheet from the General for Taxation and Customs Union.