Withdrawal of €22 low value consignment exemption and new IOSS return success; 8,000+ IOSS registrations; Council backs VAT in the Digital Age further reforms
The European Commission has confirmed that EU member states have collected €1.9 billion between July and December 2021, the first six months’ operation of the Import One-Stop Shop (IOSS) returns and withdrawal of the €22 VAT exemption on low value consignments. This was part of the 1 July 2021 EU e-commerce package reforms. The withdrawal of the €22 exemption accounts for €690 million of the new revenues in the first six months.
This implies €3.8 billion annual run rate.
The EC says that around 8,000 sellers and deemed supplier marketplaces have registered with the IOSS scheme so far. This new pan-EU B2C import sales reporting regime covers 94% of all eligible transactions.
This does not include further revenues from the withdrawal of the distance selling thresholds and introduction of OSS returns for distance selling within the EU, plus the marketplace deemed supplier obligations. This means this revenue haul will rise substantially as the estimates become available.
Council of the European Union back further reforms
On the back of this success, the EU Council has backed further reforms being put forward by the EC, including:
- Single EU VAT registration, extending OSS to all B2C goods movements and services plus harmonisation of the use of the reverse charge on B2B goods and services;
- Make the IOSS mandatory for all relevant transactions, and removal of the €150 threshold – this would require close consultation with Customs;
- Review harmonisation of the obligations to appoint Intermediaries for the different schemes;
- Broader measures within the VAT in the Digital Age reforms, including e-invoicing and platform economy
EU VAT in the Digital Age reforms
|EU VAT in the Digital Age|
|3 reforms to improve efficiency of VAT for all and reduce fraud|
|1. Digital Reporting Requirements||What options are there to harmonise the digitisation of transaction reporting amongst the member states. The EU is looking at: Continuous Transaction Control (CTC) e-invoicing, live reporting; or Periodic Transaction Controls (PTC) invoice listings. Also if at a country, EU or hybrid-level.|
|Read more about EU Digital Reporting Requirements (DRR)|
|2. VAT treatment of the platform economy||How can EU member states adapt their tax systems to reflect the new role taken on by Electronic Interfaces - platforms and marketplaces which have enabled millions of private individuals to provide services and goods for the first time. How should the VAT Directive be modified to capture the new dynamics created in the gig and sharing economies, including imposing full deemed supplier VAT obligations on platforms as with 2021 e-commerce package for goods.|
|EU VAT Treatment of Platform Economy update|
|3. Single EU VAT registration; extension of OSS to all B2C and certain B2B||Following the 1 July 2021 introduction of the One Stop-Shop (OSS), can this be extended to cover more B2C and all / any B2B transactions (e.g. movement of own stock across borders) to reduce the foreign, non-resident VAT registrations and reporting burden|
|More details on Single EU VAT Registration|