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EU Special Arrangements exemption – July 2021 e-commerce package

The July 2021 EU ecommerce VAT package imposes obligations on EU and non-EU sellers making imports to consumer to charge VAT in the checkout on sales not exceeding €150. However, there is a ‘Special Arrangements’ exemption whereby the seller can have a postal service tax over the VAT collections role.

Sellers and facilitating marketplaces of import consignments not exceeding €150 must collect the VAT at the checkout. They may then declare the VAT they collect on via the new Import One-Stop-Shop IOSS – a single return of all EU imports. The Special Arrangements is an optional alternative for them.

Special Arrangements let marketplaces off the import VAT hook

From 1 July 2021, all imports into the EU will be liable to VAT. The €22 VAT-free exemption will be withdrawn.

Sellers and deemed supplier marketplaces may alternatively opt to pass the import VAT collections to postal operators, express carriers and customs agents. Under the special arrangements, the customer pays the VAT to the declarant/person presenting the goods to customs. The Special Arrangements operators then pay the tax authorities on a monthly basis on a cash-received basis. The deadline will be the 16th of the month following the month of import.

Member states may allow operators to apply the standard VAT rate to all these transactions. This limits the risk of fraud or mistaken classification on reduced VAT rate goods, and helps the Special Arrangement operators who are unable to determine the correct VAT rate.

EU VAT reforms

Reform (click for details) Update
2025 VAT registration thresholds equivalence foreign businesses On track
Virtual events VAT rule changes Agreed
2024 Payment providers' seller transaction reporting and bookkeeping obligations On track
Digital Reporting Requirements (DRR), e-invoicing and live transaction reporting Implementation of VAT in the Digital Age?
2023 DAC 7 - marketplace reporting obligations on sellers' activities On track
Financial Services VAT exemption reform proposals Consultation complete; proposal 2023
Tour operator margin scheme VAT reforms EC undertaking fresh review
2022 EU definitive VAT system Member states not agreed on format
EU reduced VAT rate freedoms Enter into force 6 April 2022
IOSS reforms to prevent double taxation Proposals early 2022
VAT in the Digital Age proposals On track for Q3 2022 detailed proposal
Single EU VAT registration - extension of OSS for B2B and B2C On track for Q3 2022 detailed proposal
Proposal for VAT treatment of the platform economy On track for Q3 2022 detailed proposal
VAT Gap Initiative Q3 2022
2021 One-Stop-Shop (OSS) single EU VAT return In effect
Ending €22 import VAT exemption; new IOSS return In effect
Marketplace deemed supplier EU VAT reforms In effect
2020 EU four Quick Fixes for VAT In effect
Tax authorities anti-VAT fraud cooperation In effect
Tax Action Plan - 25 VAT and other tax reforms roadmap See 'VAT in the Digital Age' and others
2019 Simplification of e-services VAT compliance and thresholds In effect
Single and multi-use vouchers In effect
2018 Lower e-book and publications VAT rates In effect, although not all EU states have adopted the option
EU Generalised Domestic Reverse Charge VAT Mechanism In effect, although no country has adopted this voluntary option
2015 B2C electronic services VAT reforms - MOSS return In effect

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