E-commerce: changes on July 1st 2021

From July 1st, 2021, businesses in the European Union will be able to declare their VAT via the VAT one-stop shop. Its purpose is to facilitate the management of taxes.

The current system:

Let’s take the example of Marc, he has a company based in France that sells clothes, so he has a French VAT number. Thanks to e-commerce, Marc is expanding his customer base internationally. His clothes are sold in Spain, Italy and Belgium. As the turnover in each country exceeds €35,000, Marc has to declare the VAT corresponding to these sales in the 3 countries and therefore create a tax registration number in Spain, Italy and Belgium.

What changes with the one-stop VAT shop?

Since April 22nd, Marc has the possibility to register to the one-stop VAT shop. This portal will allow him to declare and pay VAT on all his sales on a single platform (the same one he currently uses to declare VAT in France). The amount of taxes due in the different countries will be transferred automatically. He no longer needs to register in several states.

Note that this system is not forced, although it is very useful.