UK VAT Update
New VAT updates have been introduced by the European Union for businesses making digital sales to consumers across the EU. This should simplify the process for SME’s selling digital services cross-border.
From January 1, 2019, two changes were made to the rules around the supplies of digital services to consumers across the EU.
Firstly, this change will allow non-EU businesses, who have already registered for VAT in the EU, to use the non-union VAT MOSS scheme to account for VAT on sales of digital services to EU member states. This group were previously restricted from using the VAT MOSS system.
- This legislation will allow all non-established taxable persons making supplies of digital services to customers in the EU to join the Non-Union VAT MOSS scheme, even if they have previously VAT registered in the EU.
Secondly, the new update will also introduce a €10,000 annual threshold for cross-border B2C sales of digital goods throughout the EU. Meaning you can charge the VAT rate of your home country when under the threshold and not registered in another EU member state.
Once you have crossed the threshold, you will need to charge the VAT rate based on the customer’s location.
You will also need to declare any VAT owed through VAT MOSS (Mini One Stop Shop).
German VAT Update 2019
From 1st January 2019, new legislation came into force making marketplaces jointly liable for VAT in Germany.
As a result, marketplaces such as Amazon.de have become jointly liable for their sellers’ unpaid VAT if they do not take the appropriate steps.
The legislation has introduced new requirements for online marketplaces to collect information on traders, who are using their platform, which supply goods or services to German consumers for VAT enforcement purposes.
Furthermore, Amazon has released a message to sellers indicating that their accounts may be suspended if they have not registered with the German tax authorities and obtained a Tax Certificate.
Please note, each marketplace you sell on within Germany may interpret these rules differently, to cover their risk of joint liability for VAT owed by non-compliant sellers. This means that they may request all sellers that operate on .de domains (e.g. amazon.de) to VAT register and obtain the Tax Certificate.
Switzerland VAT Update 2019
In order to create an equal footing with companies domiciled in Switzerland, the Swiss Tax Authority has revised their VAT Act for online retailers.
The new legislation came into force on January 1, 2019 making online retailers who generate at least CHF 100,000 from small consignments liable for VAT.
Small consignments are defined as all goods sent from abroad into Switzerland with an applicable import VAT of below 5 Swiss Francs.
For anyone who achieves a turnover of at least CHF 100,000, from consignments which are transported or dispatched from abroad into Switzerland, their deliveries (from small consignments) will be deemed to be domestic supplies and the seller will need to become VAT registered in Switzerland.
Canadian QST New Rules
Quebec has announced a new Quebec Sales Tax (QST) regime to collect QST from suppliers that are non-residents of Quebec.
There is a threshold of $30,000 annual sales to Quebec consumers before registration and collection of QST is required under the ‘small supplier’ rule.
Suppliers outside of Canada, who are NOT GST/HST registered, needed to register and collect QST from 1 January 2019.
Canadian businesses located outside of Quebec and businesses registered for GST/HST purposes have until September 1, 2019, to register and start collecting QST.
Netherlands Increased VAT Rate
Following the vote in the British parliament on the deal to leave the EU, we are still unsure on the outcome of the exit plan. Here at SimplyVAT.com, our aim is to provide as much information on the impact on VAT for businesses, following the outcome of Brexit.
Moving stock to An EU Country e.g. Germany:
For those sellers considering moving their stock into Europe, in preparation for the exit from the European Union, we look at the options here:
Germany does not require fiscal representation for non-EU sellers.
It can take between 6-12 weeks to VAT register in Germany.
Although Germany is the second biggest e-commerce market in the European Union, we suggest you consider the economic impact of moving your stock into the country and the additional compliance costs it will create for your business.
You may want to consider the following when looking to store your goods in another EU country as a non-EU resident.
- Cost of registration
- Filing frequency
- The need for Fiscal Representation
- Ease of doing business in that country