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Published: 29th June 2021

New EU eCommerce VAT rules that may affect your eCommerce business.

Written by : eCAI Admin
Read Time : 4 Min| 2263

July 1st sees the introduction of new EU eCommerce VAT regulations that streamline the processes companies use to register, declare and pay VAT for goods sold across Europe. 

 

If you sell more than €10,000 in value of goods into all EU countries (combined) then you must declare and pay for each country in a new “One Stop Shop” (OSS) available through ros.ie. 

 

In addition, all imported goods valued at €22 or less will no longer be exempt from VAT. This means cheap goods flooding into this country from outside the EU will have to apply the current Irish 23% VAT rate. 

 

To simplify things, we have broken down the main points that affect Irish online sellers. 

 

So... What’s happening on July 21st?

The 3 major changes affecting eCommerce are:



  1. The introduction of a “One Stop Shop (OSS) for processing all your VAT when selling into other EU states. 
  2. The end of VAT exemption on goods valued at or below €22 imported from outside the EU 
  3. Deeming Marketplaces as the supplier, which means they have to collect and process distance selling goods within the EU

 

What's the advantage for me?

If you are selling goods online into other markets, the process has got easier and streamlined. 

Cheap goods coming into the EU are now liable to VAT at any price, which means local sourced or sold goods can compete. 

 

What do I need to do to be compliant?

The rules only apply if you are selling goods through eCommerce into other countries in the EU, and then only if the total amount exceeds €10,000 in value annually. 



  1. Confirm you are eligible by totting up your sales across Europe. If your sales are greater than €10,000, then you must process the goods for each country.
  2. Register your business on the “One Stop Shop” (OSS) on www.ros.ie 
  3. Collect, declare and pay the relevant VAT for each country quarterly on the OSS.

 

Do I need to make changes to my website?

Depending on your setup you may need to make changes to your website. Ideally you should be able to set the local VAT for each country and charge the shopper accordingly. 

You can choose the point of delivery as an indication of jurisdiction and apply the country VAT rate at checkout. 

 

Good systems will calculate the amount payable to each country for your quarterly billing period. 

If in doubt, talk to your provider or reputable developer. 

 

What happens if I am selling through a marketplace?

The new rules deem the marketplace as the supplier. Therefore the onus is on the marketplace to charge and process the correct VAT at checkout on your behalf. 

 

Do I need to register the OSS if I am export selling on a Marketplace like Amazon or eBay?

Not any more. 

The new rules puts the onus on the marketplace to collect and process the VAT in each respective country. 

 

How is this different from what the process was before?

Prior to these new changes by the EU, each country had set a distance selling threshold (normally around €35,000). Companies whose sales exceeded the set threshold in each country would have to register, collect and pay VAT with each local authority. This was a very time consuming and cumbersome process. 

 

In addition, companies outside of the EU were exempt from paying VAT on goods under the value of €22 which saw focused sales of purposely priced cheap goods flooding in from the far east and beyond. 

 

What happens to products sold in the EU that are imported from outside the EU?

All products regardless of price are liable to collect, register and pay vat to the country the goods are being shipped to. Whereby a company has not registered with the OSS, the delivery agent or marketplace will collect and process the VAT. 

 

What if I sell more than €10,000 (combined) of goods to other EU states?

 

If you are selling goods through your own website or app  to other EU countries you no longer have to register for VAT in each country. Previously companies had to understand the VAT threshold in each country they sold in and if the total annual value of goods sold into that country exceeded that threshold then you had to register and process VAT in the respective jurisdiction. 

 

NOW….. if your sales exceed €10,000 across all EU states you must register and process VAT payments in one single One-Stop-Shop or OSS as the EU calls it. In Ireland this is done through www.ros.ie.

 

Full information from Revenue.ie can be read here.  

 

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