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EU put Croatia, Denmark and Lithuania on yellow card for e-commerce package implementation

Three member states fail to clarify proper adoption of new July 2021 e-commerce VAT rules

The EU’s European Commission has warned with a Letter of Formal Notice Croatia, Denmark and Lithuania that they have failed to detail their implementations of the July 2021 e-commerce package VAT reforms ((EU)2017/2455). This includes the new One Stop-Shop OSS return, and the rules on charging VAT at the point-of-sale for consignments not exceeding €150 (supported by the new Import One Stop-Shop IOSS)

All three will now have two months to respond to the EC’s points or face the start of infringement proceedings.

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According to the EC, since Denmark, Croatia and Lithuania have failed to provide clear explanations on the way they have transposed these directives, the Commission cannot check that these Member States have completely and correctly transposed the relevant provisions into their national law.

EC process for dealing with failure to comply with EU rules

If the EU country concerned fails to communicate measures that fully transpose the provisions of directives, or doesn’t rectify the suspected violation of EU law, the Commission may launch a formal infringement procedure. The procedure follows a number of steps laid out in the EU treaties, each ending with a formal decision, starting with this step take by the EC – a letter of formal notices explaining the country’s actions. If no satisfactory answer is received, the EC may then seek a reasoned opinion. After that, the Commission may refer the matter to the European Court of Justice.


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