European Commission comes out with new VAT proposals

Content provided by EuroCommerce – As foreseen in the EU VAT Action Plan launched earlier this year, the European Commission has issued several legislative proposals, aimed at taking into account developments in e-commerce.

New proposals favouring cross-border e-commerce

The proposals include an expansion of the VAT Mini-One-Stop Shop to cover tangible goods from 2021, in order to help VAT payments for cross-border sales. The European Commission has also announced a threshold of 10,000 euro in turnover below which companies will be able to handle cross-border sales similarly to those of their home market.

Small consignments imported from third countries (currently those with a value of less than 22 euro) will no longer be exempt from VAT. This threshold has favoured direct sales from outside Europe to the detriment of EU traders. Member States will also be entitled to apply reduced VAT rates on e-publications such as e-books and online newspapers.

The proposals will have to be adopted unanimously by the Council, which has in the past led to action being blocked. Further legislative initiatives such as specific measures to help SMEs and new rules on reduced VAT rates will be published in 2017.