2021 VAT

Postponement of the 2021 VAT ecommerce package

July 28, 2020 in European VAT, Marketplaces

Postponement of the 2021 VAT ecommerce package has been formally adopted by the EU 

The implementation of the 2021 VAT ecommerce package has now formally been postponed by the European Council. This means that the new rules will apply as of 1st of July 2021 instead of 1st of January 2021. The 6-month delay should give Member States and postal operators enough time to finalise the IT developments required by the new distance selling VAT rules.  

The VAT ecommerce package is a set of legislation reforms designed to simplify the collection of VAT in the EU. It includes measures such as the extension of the VAT Mini One Stop Shop (VAT MOSS) and increased VAT liability for marketplaces. 

This delay will come as welcome relief to some tax authorities across the EU. Preparing for the new legislation was always going to be a monumental task, but with the effects of Covid-19 putting an additional strain on their resources, tax authorities might be thankful for the extra time. 

Further delays possible? 

In the statement published by the European Council, Germany and The Netherlands have shared that they would be in favour of further postponement. They propose delaying the introduction of the new distance selling rules to 1st January 2022 at the earliest. According to both member states, deferring the date of application beyond six months would allow the correct application of the new distance selling rules. 

Additionally, Germany and the Netherlands would recommend the European Commission to evaluate in early 2021 if any progress has been made across the EU on the implementation of the new rules.

What does this mean for you? 

For online traders, this delay will mean that you will need to continue complying with current EU VAT law. For more information on what that might look like, take a look at our Frequently Asked Questions. 

If you have concerns about how the new VAT ecommerce package might affect you or how to comply with current EU VAT law, please feel free to contact our team! 

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