EU Council adopts new VAT rules for E-commerce

VAT rules E -commerce


The European Council has adopted new VAT rules for E-commerce which shall become effective as of 2021.


On 21.11.2019, the European Council has adopted Council Directive (EU) 2019/1995 establishing new VAT rules for the e-commerce. The new VAT rules are part of the EU’s ‘digital single market’ strategy. They concern distance sales of goods to consumers and certain domestic supplies. The aim is to both achieve cost savings for businesses and increase tax revenues for the EU member states by reducing tax frauds.

Brief overview of the new VAT rules for the e-commerce

  • Businesses selling goods to EU consumers shall in future be able to use the so-called “Mini one-stop shop-procedure“ (“MOSS”). Currently, this procedure is only available to certain electronically provided services supplied to consumers.
  • Online marketplaces become deemed suppliers for VAT purposes and responsible for VAT collections for non-EU sellers using their platforms in case of
    • the sale of goods up to a value of €150 sold on their platforms;
    • sales of all goods sold on their platform where the seller uses fulfilment centres.

Non-EU sellers shall declare the import and related import VAT followed by a zero-rated sale to the marketplace used to sell the goods within the EU. The import VAT may be recovered by using the new MOSS procedure. The marketplace shall perform the VAT-rated domestic sale to the customer. Additionally, it shall be obliged to keep records of sales of goods or services made by businesses using their platforms.

  • Start-ups and SMEs with maximum 10.000 EUR annual cross-border online sales shall still be allowed to apply their home country VAT rules.
  • The rules also provide for enhanced administrative cooperation between member states to accompany and facilitate this extension.

The provisions come into effect as of 2021. The member states have time until 31.12.2020 to implement the new VAT rules for E-commerce into national law.


Are you interested in more information about the basic VAT rules? Then check out our E-Learnings VAT – Basic online course (with certificate) and VAT & B2B transactions (E-Learning incl. certificate).



Picture: Hands holding credit card and using laptop. Online shopping@ivan kruk/