Ecommerce News

Ecommerce News July 2024

July 15, 2024 in Ecommerce, News, VAT

Quick-fire VAT and Ecommerce news from around the world to help you stay up-to-date with the market.

ViDA Updates

In June, the VAT Expert Group (VEG) of the European Commission published documentation covering Single VAT Registration (SVR) and the Import One Stop Shop Scheme (IOSS).

Implementing SVR

SVR is proposed as part of the VAT in the Digital Age (ViDA) package. Whilst the EU hasn’t reached a consensus on the overall package, ministers have reached an agreement on SVR. The proposal includes a mandatory reverse charge mechanism for domestic B2B supplies. It will extend the use of the One Stop Shop (OSS) scheme to domestic EU B2C supplies and include the transfer of own goods into the OSS.

Preventing IOSS Fraud

Tackling VAT fraud is one of ViDA’s main goals. Unfortunately, the IOSS scheme has a weak point commonly exploited for this purpose. The IOSS identification number is often shared, increasing the risk of it being exposed and then hijacked for fraudulent use. It can be hard to find a parcel with a duplicated IOSS number. It’s hard to cross-check the numbers both for the sheer volume of low-value parcels, and the number of parties involved in cross-border logistics.

To solve these issues the verification process needs to be improved. The recommendation is that a secure transaction number be added to the end of the IOSS number. Doing so would make a unique ID number for each parcel. Then, digital signature technology could be used to create a unique digital ID for each platform or supplier. These improvements would be made alongside updates to existing logistics infrastructure to automate and streamline verification.

EU SME Special Schemes

EU Member States now have the option to adopt two new threshold regimes; National Threshold and Cross-Border Threshold. The National Threshold is similar to existing schemes. SMEs wouldn’t need to register for VAT domestically if their annual turnover is below the national threshold. Each state sets their threshold, and the scheme only applies to domestic sales.

The Cross-border threshold adds a singular pan-EU threshold of EUR 100,000 (excluding VAT). The threshold will apply to EU businesses trading cross-border within the EU. You won’t need to register for VAT in additional Member States if your annual revenue is below that State’s national threshold and your total annual sales across the EU don’t exceed the new EUR 100,000 threshold. You will need to notify your local tax authority which thresholds you’ll be using. Your tax authority will then allocate you a new ‘EX’ Number.

Changes to VAT Filing Processes

Starting October 2024, Spain will automatically accept a correction and issue a refund, then verify the correction. It’s especially important to file accurate corrections as the Spanish tax authority will fine you if they find that your refund was too large.

In Switzerland, all VAT-registered companies will have to file their returns online starting January 1st 2025. If your company submits on paper you can continue to do so until December 31st 2024, at which point you’ll need to switch to the ePortal.

Import Duties for All Packages

You may remember that in June, Germany’s Federal Finance Minister proposed to end the pan-EU EUR 150 import threshold. Large retailers like Temu and Shein regularly split their orders into multiple shipments to avoid paying the import VAT as part of their broader strategy to out-compete EU businesses. Now, a new proposal from the EU Commission aims to impose duties on all parcels from outside the EU regardless of their value.

The proposal is just that, for now. Although the measure would have less impact on American companies like Amazon (whose customers mainly buy through EU sellers), the proposal is likely to cause debate among EU Member States. It’ll be a while before we see it turned to law, if at all.

VAT Rate Updates

In Greece, the reduced 13% VAT rate for Taxis has become permanent. The same rate remains for takeaway and delivery coffee, cocoa, tea and chamomile. Served items, however, will return to 24%.

On the 1st of September 2024, Finland will increase both the standard VAT rate and the insurance premium tax rate from 24% to 25%.

Spain has extended the 0% reduced VAT rate for basic foods until the 30th of September 2024. The rate on olive oil drops for a third time, this time from 5% to 0%.

The End of Call-Off Stock for Amazon Sellers in the EU

Not long left for Amazon’s Call-off stock program, which ends 1st of August 2024. Amazon hasn’t given an official reason for dropping the program, but it’s suspected that the decision was made in advance of changes from ViDA. If you’ve been selling into the EU using this program you’re probably wondering what you can do now. We’ve laid out all your options (and everything else you need to know) in our latest blog.

E-invoicing is Delayed (again)

E-invoicing in Spain will now take part in two phases. The first is just for large taxpayers (turnover above €8 million) and now rolls out in 2026. All other taxpayers will change over in 2027. This delay is caused by the Spanish government’s desire to complete technical work on the system before approving the legislation.

Spain is also likely to delay the certified VERIFACTU electronic invoice obligation plan which is currently due for 1st July 2025. It’s likely this now won’t be ready until early 2026.

Latvia is proposing to move the start date for B2B electronic invoices from the 1st of January 2025 to 1st of January 2026.

Ecommerce Marketplaces News

Austrian marketplace Shöpping is planning to launch in Germany in Q4 of this year. The expansion will allow Austrian sellers on the platform to sell and deliver to Germany. Their ambition is to increase the number of sellers from across EU member states on the platform.

TikTok Shop is reportedly coming to the EU this summer, but Bloomberg reported at the end of May that ByteDance has halted plans in Europe, Mexico and Brazil. The aim, it would appear, is to entrench themselves in the US market, where they’re currently fighting Congress’ mandate to divest TikTok US or face a ban. The platform itself is pretty quiet on the topic, so all we can do is speculate.

German marketplace Otto is outsourcing part of its logistics to Poland and opening the marketplace up to EU sellers.

The Otto Group’s logistics is handled by one of its own branches, The Hermes Fulfilment Group. This is the first time they will be building a new fulfilment centre outside of Germany. From the centre in Iłowa, close to the border between the two countries, Otto will be shipping orders to German customers.

If you sell on Otto and your stock is going to be held in Poland, you will need to register for VAT in Poland. Get in touch with us today if you’d like assistance with the registration.

If your business is based in the EU and interested in selling on Otto, you will only need to meet the requirements for German VAT to do so.

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