• On 1 July 2021, the VAT rules on cross-border businessto-consumer (B2C) e-commerce activities changed. The rationale for these changes is to overcome barriers to cross-border online sales and address challenges arising from the VAT regimes for distance sales of goods and for the importation of low value consignments. It is envisaged that EU Businesses will be able to grow in a simplified, fairer environment within the European Digital Single Market.
• Online sellers, including online marketplaces can register in one EU Member State and this will be valid for the declaration and payment of VAT on all distance sales of goods and cross-border supplies of services to customers within the EU. Businesses should benefit from a reduction in red tape of up to 95% by registering with the new One Stop Shop (OSS).
• The existing thresholds for distance sales of goods within the EU will be abolished and eplaced by a new EU-wide threshold of €10,000. Below this €10,000 threshold, the supplies of TBE (telecommunications, broadcasting and electronic) services and distance sales of goods within the EU may remain subject to VAT in the Member State where the taxable person is established.
• The VAT exemption on importation of small consignments of a value up to €22 will be removed. This means all goods imported in the EU will now be subject to VAT. The Import One Stop Shop (IOSS) has been created to simplify the declaration and payment of VAT. For consignments of €150 or less imported directly from Non-EU countries, businesses can now charge VAT at the point of sale instead of customers having to pay import VAT on delivery.
• For Non-EU based suppliers they must either register for IOSS through an EU established intermediary, or, should the country where they are established have a mutual assistance agreement with the EU, then they can register for IOSS directly.

 
If your business if affected by these changes – talk to us today

On 1 July 2021, the VAT rules on cross-border-business-to-consumer (B2C) e-commerce activities changed. The rationale for these changes is to overcome barriers to cross-border online sales and address challenges arising from the VAT regimes for distance sales of goods and for the importation of low value consignments. It is envisaged that EU Businesses will be able to grow in a simplified, fairer environment within the European Digital Single Market.

The Revenue have confirmed that employers will not be able to back date a registration for the new Employee Wage Subsidy Scheme (EWSS). However an employer can register for the scheme at any stage once they meet the criteria, even if this is after the September payroll is run. Once registered you will only receive the subsidy for all future payroll runs.

As part of the Government’s July Jobs Stimulus, the standard VAT rate of 23% will be temporarily reduced to 21%. This will come into effect from the 1st September 2020 and stay in place until the end of February 2021.

The Revenue have a guide on how businesses should deal with VAT rate changes, which you can find here. One thing to highlight from the guide is if you are sending an invoice to a VAT registered business the VAT rate that should be applied is the rate in force at the time of issue of the invoice. If you are sending an invoice to a non-VAT registered person the VAT rate applied on the invoice will be based on the date the goods or services were supplied, not the date of the invoice.
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From an accounting point of view most systems should be able to deal with a new rate of VAT. I would suggest adding a new VAT rate as you will need to revert to the 23% from the 1st March 2021. For businesses who pay VAT on a receipts basis you will need to make sure your systems are tracing the VAT back to the invoice and not the date of the lodgement.