VAT | 18. May 2020

EU postpones VAT reform package by six months

The European Commission is postponing its package of measures to reform the EU VAT system for e-commerce. The planned changes have now been announced for July 1, 2021. by

On 1 January 2021, the Single European VAT Area was supposed to come into force with the implementation of a number of reforms. Last week, the European Commission announced the postponement of its package of measures. The EU’s explanatory memorandum: The COVID-19 outbreak has placed a heavy burden on businesses and member states. It is hoped that a postponement will take this into consideration.

„The European Commission has decided today to postpone the entry into force of two EU taxation measures to take account of the difficulties that businesses and Member States are facing at the moment with the Coronavirus crisis.“

Among the postponed innovations is the creation of the One-Stop-Shop (OSS) as a central contact point. As it is already in use for electronic services, the member states are supposed to forward VAT to each other via this One-Stop-Shop. The delivery thresholds, which vary from one EU country to another, will also remain in place for the meantime, as well as the tax exemption for imports of small consignments of up to EUR 22 from third countries. An overview about the most important changes 2021 can be found here.

1 July 2021 was mentioned as the new target date. Depending on the development of the corona pandemic, the Commission proposes the possibility to extend the deferral period by a maximum of three additional months.

For information on our products, which are already preparing your company for the planned innovations of the EU Commission, please contact our sales team.

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