If you deliver to countries in Europe with your webshop, you have to deal with different VAT rules than if you only deliver within the Netherlands. New rules came into effect from 1 July 2021 new EU VAT directive for e-commerce. One of the rules that is changing is the VAT on distance sales.
What are distance selling?
Distance sales are sales to private individuals – and entrepreneurs who do not file a VAT return – who are established in other EU Member States.
VAT distance sales: what will change?
The new rules apply if your webshop achieves a turnover of at least € 10,000 per year with sales to consumers in EU countries (outside the Netherlands). If the turnover remains below € 10,000 per year, you may continue to charge Dutch VAT.
From 1 July, the threshold amounts per individual EU country will be abolished. There will be 1 threshold amount of € 10,000 in total for all countries. This threshold amount applies to all services, i.e. to goods and digital services.
- If you remain below the threshold amount, you calculate the Dutch VAT rate and file a VAT return in the Netherlands. The transport must then start in the Netherlands.
- From the moment you exceed the threshold of € 10,000, you will charge the VAT rate of the EU country where your customer is located. You can arrange this VAT return in 2 ways:
- VAT return in the country in which you sold
- One Stop Shop (One Stop Shop or OSS)
In the OSS system you can pay all VAT that you previously had to pay to each country separately to the Dutch tax authorities. You must then register your company for the ‘Union scheme’ within the new OSS system. The tax authorities ensure that the VAT is passed on to the various EU countries. You can register via Mijn Belastingdienst Zakelijk. You file the declaration every quarter.
No input tax can be claimed back via the OSS. You must reclaim this via a foreign VAT refund request. You can directly reclaim foreign VAT if you choose to file a VAT return abroad.
MOSS becomes OSS
Suppliers of digital services can already use a one-stop-shop system, the so-called MOSS system. As a result of the new regulation, this system will be transformed into OSS and can therefore be used for digital services and distance sales.
Are you also not allowed to use the new threshold amount?
From 1 July you can still choose not to use the threshold amount and file a VAT return abroad. This is advantageous if the VAT rate in that country is lower than in the Netherlands and a price including VAT has been agreed with the customer. The foreign input tax of that country can also be reclaimed via the foreign VAT return. Of course, this is extra administrative work that we are happy to assist you with!
Other changes include:
- The VAT exemption up to € 22 that now applies to the import of goods outside the EU will expire. Under certain conditions, you can use the import scheme within the OSS system for imported shipments of a maximum of €150. You do not pay VAT on import, but once a month via the OSS system.
- Platforms involved in facilitating sales to private individuals, such as Amazon, will therefore, from 1 July, be responsible more quickly for the VAT payment of the sale to private individuals of imported goods. The platform must then play an active role, such as facilitating payments.
If you have any questions about this, please contact us.