The European Commission’s aim is to simplify VAT obligations for companies carrying out online cross-border sales of goods or services to final consumers and to ensure that VAT on such supplies is paid correctly to the Member State of the customer, in line with the principle of taxation in the Member State of destination. As a next step of this goal, the European Parliament (EP) adopted the new VAT e-commerce package, which planned to be applicable from 2021. This package will combat VAT fraud and ensure fair competition for EU and non-EU businesses.
The modification contains that the businesses operating electronic interfaces such as marketplaces or platforms will, in certain situations, be deemed for VAT purposes to be the supplier of goods sold to customers in the EU by companies using such marketplace or platform. Consequently, they will have to collect and pay the VAT on these sales. The adopted rules would ensure that VAT will be charged to the businesses running e-commerce in the state where the goods or services are used. According to the provisional calculations, it will generate an annual revenue of EUR 7 million to the Member States.