The new VAT scheme for e commerce


The CMS Tax group is pleased to launch the guide “The new VAT scheme for e-commerce”.

This guide covers the VAT e-commerce package, which was first approved in 2017 (Directive 2017 / 2455) and added to in 2019 (Directive 2019 / 1995) and which is finally due to enter into force on 1 July 2021 (after being postponed due to the coronavirus crisis). This new, extensive and bold package aims to adapt the VAT system, which was mostly designed for offline transactions, to the explosive growth of business-to-consumer (“B2C”) online transactions (In 2019, the EU online market is estimated to have reached EUR 620bn )in the context of our technology-driven world.

The new rules are set to facilitate online sales within the EU Single Market, by easing compliance with e-commerce while promoting a level playing field between EU and non-EU businesses, thus increasing VAT revenue (In 2020, the EU estimates a EUR 7bn loss in tax revenues in the e-commerce sector.)and targeting fraudulent businesses. The enlargement of the one-stop-shop (OSS) to most of the concerned transactions will ease the reporting and payment obligations.

For more information, please get in touch with your usual contact at CMS.