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6 new VAT laws to ensure compliance in 2021

By / In EU VAT / October 3, 2021

Marketplaces become deemed suppliers when facilitating sales in the EU, UK, Canada, New Zealand, US, Norway.

EU: distance sales thresholds were replaced by EU-wide 10K threshold for digital services and goods. That means that intra-community sales are subject to VAT in the EU country of destination.
To simplify the reporting obligations due to this removal Mini one-stop-shop was extended to a One-stop shop for goods and services.

Import one-stop shop scheme: De minimis for Import of Low-value goods was removed and now VAT needs to be paid for all imported to the EU goods. It was done to equalize non-EU and EU sellers. A parcel with an intrinsic value of less than 150 euro is an LVG. In order to make imports simpler and less costly European administration introduced the Import one-stop shop scheme for LWG.

Brexit: 1st of January this year finished the transitional period for the UK to leave the EU. That means that free circulation for goods and services is no longer available for goods that cross the border between the UK and EU. Customs procedures must be executed for all the goods small parcels or big supplies going from the EU to the UK and inversely.

Great Britain removed De minimis and implemented a new VAT scheme for the import of LVG. LVG – is an order with an intrinsic customs value of less than 135 pounds.

Northern Ireland (NI) is treated as a Member State about VAT on goods. That means no need to fill in customs declaration or do customs clearance. Businesses also can benefit from a distant sales threshold and don’t register for VAT if they sell less than 70K Pounds to NI. NI is not treated as a Member State concerning VAT on services. That means that if you sell subscriptions to NI you need to register for VAT in the UK.