From 1 July 2021, new VAT rules apply for sellers and marketplaces serving European Union consumers under the EU ecommerce VAT package. This will include complex invoice obligations imposed by both the EU VAT Directive and optional choices for the member states. This blog covers the invoicing rules for sellers and marketplaces (deemed supplier).
OSS VAT invoicing rules – Union scheme
If EU sellers opt to use the One-Stop-Shop (OSS) VAT return for goods, allowing a single pan-EU VAT filing in their country of residence, they do not have to produce B2C invoices for their sales. If they opt not to use the Union Scheme, they will continue to have to issue a VAT invoice under the VAT Directive rule. They should use the invoicing rules of their country of identification – where they are EU resident.
For services, there is no EU VAT Directive obligation to require B2C invoices. However, member states do have the option to impose this on sellers. If the seller uses OSS, they must follow the member state rules of their country of identification. If they do not, they should use the country of supply or where their customer is located.
OSS VAT invoicing rules – Non-Union scheme
For non-EU sellers or marketplaces, the same rules as above apply. For services, follow the non-Union OSS country of identification rules which determine if B2C service VAT invoicing is required. If not using the non-Union OSS, then apply the country of supply.
IOSS VAT B2C and B2B invoice rules
B2C imported consignments are not required to have a VAT invoice under the VAT Directive. They will need a commercial customs invoice for clearance procedures. However, member states have the option to impose these requirements.
Marketplaces EU deemed seller VAT invoice rules
Certain transactions are the marketplace’s responsibility as the deemed supplier under the ecommerce marketplace reforms.