New EU & UK 2021 VAT Regulations for Digital Marketplaces

In 2021, the European Union will introduce new VAT reporting requirements for digital marketplaces and their online sellers.

Each digital marketplace will need to collect and remit VAT on these sales to EU Member States and confirm that sellers are meeting their own VAT compliance obligations.

Many non-EU tax authorities have introduced or plan to introduce similar rules. For example, Australia, New Zealand and Norway introduced similar changes in 2018, 2019 and 2020.

The primary reason for these changes is to level the playing field between domestic and non-resident suppliers.
 

What do these changes mean for online marketplaces and digital platforms?

As a digital marketplace, it will be your responsibility to capture data on all transactions made on your platform. In certain circumstances, you will also be treated as the reseller of goods for EU-VAT purposes. On top of that, if your sellers are not compliant, you may be liable for any VAT due unless you have the appropriate processes and controls in place.

The impact for marketplaces
 

The extra data, processes and stakeholder management responsibilities which these rules will bring, requires a technology solution that operates in real-time within your business.
 

How can Deloitte help?

Deloitte is collaborating with Taxamo, to launch a range of new tax compliance offerings to help digital marketplaces and online sellers fully comply with these regulations.

Our collaboration brings together a combination of skills and capabilities of two complementary organisations: Deloitte’s tax compliance expertise and Taxamo’s technology platform.

Our offering helps marketplaces to:

• Correctly assign who is liable for tax for each item sold
• Calculate and collect the specific tax owed in situations where you are a 'Deemed Reseller'
• Verify that your sellers have registered for the correct tax authority and automatically monitor compliance.
  

We offer a range of modules which give you the option to implement either selected modules (working with your existing ERP or determination solutions), or the full end-to-end set, complete with compliance checks, tax determination, invoicing and treasury.