At a time when trade at distance and through electronic platforms has never been so large (and during the pandemic it was even more active), the rules that establish VAT payments in the European Union will change, as of July, affecting customers and exporting companies. But not only. Marketplaces, postal operators and tax administrations need to feel the difference too.
It is about the end of the tax exemption for the purchase of goods with a value of less than 22 euros outside the European Union. AS WELL AS less bureaucracy for companieswho can register in one EU country for VAT purposes, processing all in one digital counter…
The challenges these measures are intended to address are not new. Afonso Arnaldo, chief executive of Deloitte, signals to the Observer that companies in the EU had “contextual costs, unfair competition from companies outside the EU about the companies working here, as well as about fraud. “
COVID-19. Online purchases are expected to reach almost € 10 billion this year.
Brussels started outline a solution six years ago… And tax experts say the leap made by e-commerce at this stage, marked by worldwide restrictions, compulsory work from home and other restrictions, has made the change even more urgent.
As a result, the pandemic delayed the entry into force of these measures, originally scheduled for January 1, but the new model is even being promoted in July, promising to be a small revolution in the way VAT is paid on international trade transactions.
There was no way back. The new rules were “ inevitable in the face of exponential growth of e-commerce“- said Amilkar Nunes, inspector of EY, in statements to the Observer. Internet commerce “was subject to a high level of complexity and burden for both Member States and companies, which created obstacles to its own development.”
EU countries to share information on online sales revenue
The European Commission has conducted a study on VAT-related barriers that affect e-commerce, recalls Amilkar Nunes, which showed that “the supply of goods to other EU countries other than those in which the supplier is permanently resident or established. will entail higher costs. “
On the other hand, the tax expert recalls, “It was also found that EU companies are at a competitive disadvantage as third country suppliers can deliver goods without VAT to EU consumers as part of the import exemption for small businesses. up to 22 euros “.
And that is not all. “The complexity of the system entails the contextual costs that companies need to meet their obligations and, as such, makes it difficult for Member States to comply with requirements, resulting in estimated losses of around € 3 billion per year,” he says. Also Amilkar Nunes, based on the work of the European Commission.
Thus, the tax expert understands that the new rules put EU companies “on a par with companies from third countries», Which until now were not required to collect VAT; they will simplify “VAT obligations for companies involved in intra-Community e-commerce” and contribute to “the further development of the EU single market”. And the icing on the cake: “All this will enable Member States to generate more revenue. “…
The Observer has tried to get an estimate of the additional tax revenues from the Ministry of Finance under the new rules, but has not yet received a response.
A purchase of cheap earrings on a Chinese platform, a mobile phone case in a UK store or a book in the US for less than € 22 counts until June 30, with VAT exemption in Europe, which is an advantage for consumers who, however, making these purchases creates a “distortion competition between companies, ”emphasizes Amilcar Nunes. Those who ship earrings, books, or any other item to buyers in the community area have a competitive advantage below this value compared to those who ship these items from an EU country. Or even in the face of a company on the street, bearing in mind that today, in many cases, it is easier to shop online than to shop.