NEW EU RULES ON VAT FROM 1 JULY 2021
From 1 July 2021 there are big changes coming to EU import VAT payable by many GB businesses including those that:
- sell online to consumers in the EU
- sell within the EU’s trading bloc of 27 member states
One key change affecting e-commerce goods, in particular, is that items imported into the EU with a value less than €22 (£15) will no longer be exempt from import VAT.
This measure means that all goods sent directly from GB businesses to consumers in the EU will be subject to the local rate of VAT in the buyer’s country.
What you can do
If exporting into the EU, you can handle these new import VAT requirements via the EU’s Import One Stop Shop (IOSS) scheme.
For businesses trading within the EU, there is the One Stop Shop (OSS) scheme.
To report EU VAT via these schemes, GB businesses will require an EU VAT number obtained from an EU member state and may need to appoint an EU-established intermediary to fulfil their VAT obligations.
If GB firms trading with or within the EU don’t register for these schemes, their ability to continue such trade will be severely impacted.
