New VAT rules for e-commerce adopted | Deloitte


New VAT rules for e-commerce adopted

On 5 December 2017, the package for the modification of the VAT rules for online sales of goods and services was adopted without discussion at a meeting of the Economic and Financial Affairs (ECOFIN) Council of the European Union.

6 December 2017

For further background we refer to our Indirect Tax Alert of 5 December 2016 (original proposals) and our Indirect Tax Alert of 9 November 2017 (amended proposals).


The new rules are aimed at making it easier to buy and sell goods and services online. They are part of the EU's 'digital single market' strategy. The aim is also to improve the collection of VAT on digital services. In short the following measures were adopted:

  • The new rules extend an existing EU-wide portal (mini 'one-stop shop') for the VAT registration of distance sales. They establish a new portal for distance sales from third countries with a value not exceeding €150.
  • Online platforms are liable for collecting VAT on the distance sales from third countries with the value below €150 that they facilitate. This was not foreseen in the Commission's original proposals, but has become an essential provision of the package.
  • For start-ups and SMEs, the new rules introduce an important simplification. Below €10,000 in yearly cross-border online sales, a business will be able to continue applying VAT rules used in its home country.
  • The abolition of the threshold of € 100,000 annually for distance sales.
  • Furthermore, the new rules remove an exemption for consignments from outside the EU worth less than €22.
  • The rules also provide for enhanced administrative cooperation between member states to accompany and facilitate this extension.

The new rules set out the following timeline:

  • Introduction by 2019 of simplification measures for intra-EU sales of electronic services;
  • Extension by 2021 of the one-stop shop to distance sales of goods, both intra-EU and from third countries, as well as the elimination of the VAT exemption for small consignments.
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