EU VAT system, Quick Fixes

New in 2020: Four quick fixes for the European VAT system

The quick fixes are intended as an interim solution, while the EU Commission continues to work on a "big hit": the final EU VAT system. The EU's common VAT system is laid down in the Council Directive on the common system of value added tax. This goes back to the 6th EC Directive, which came into force shortly after the creation of the European single market in 1993. Right from the start, these regulations were intended as a transitional solution.

A lot of time has passed since then. With the triumph of digitalisation and the globalisation of the economy, business models have emerged which were not adapted to the old regulations. In order to stem the associated loss of revenue from VAT collection, four quick fixes came into force on 1 January 2020:

1) Until now, many different regulations on consignment stocks applied in the EU. These have now been standardised: whereas previously retailers only had to register for VAT purposes on the basis of a warehouse located in another EU country or fulfil reporting obligations there, this is now no longer necessary. However, the regulation only applies to one warehouse at a time - and not again if the goods are subsequently taken to other warehouses in other EU countries.

2) For the first time there is now an EU-wide regulation for chain transactions. This does not change anything in Germany, because the regulation corresponds to the administrative concept that has been practiced in this country for a long time.

3) The tax exemption of intra-Community supplies is more strictly regulated: Intra-Community supplies are now only tax-exempt if the supplier indicates the VAT idenfication number issued to the customer in the country of destination. The supplier must check its validity.

4) In order for intra-Community deliveries to be exempt from VAT, the supplier must prove that the goods were actually delivered from one EU member state to another. This proof has been simplified: Now it suffices to have two non-contradictory transport documents from independent parties, such as consignment notes or carrier's invoices.

ON TOPIC

28.09.2020

Borderless trading in Europe - better with plentymarkets and ClearVAT

If you sell your products to other EU countries, you know the challenges: different VAT rates, delivery thresholds, required registrations, declarations and last but not least the liability risk abroad. With the plugin ClearVAT you have an automated solution directly in the plentymarkets system.

10.09.2020

Price Indication Regulation in cross-border online trade

The Price Indication Ordinance regulates how goods prices must be shown to customers. In cross-border e-commerce, it poses challenges for merchants.

11.08.2020

Interim balance: A review of the tax year so far

The year 2020 put a stop to many plans. The VAT reform is also affected. We have summarised the most important developments - planned and unplanned - for e-commerce in recent months.

NEWS

18.08.2020

Shopping in the future: online shopping and stationary retail combined

Lockdowns and closed shops have given online business a huge boost in recent months. In this situation, how can stationary trade develop further and attract customers?

04.08.2020

Geoblocking in the EU: Shopping without borders?

Since the Geoblocking Regulation was introduced in December 2018, consumers may no longer be discriminated against on the basis of their nationality or place of residence. However, there is further potential for improvement for customers and online retailers.