Whether if you are a drop-shipping seller or an Online E-commerce Seller you Will probably already know everything about upcoming new VAT rules – VAT PACKAGE starting next 1st July. But if you have not started yet to prepare your business for these major changes and you do not really know how is affecting your business then you must consider taking these following actions:
- Review and monitor your supply chain in order to check and identify if your business must comply new VAT obligations. Keep in mind that distance sales threshold will be reduced to 10.000 euros from 1st July.
- Ensure and check that your ERP systems and related software are able to charge VAT accordingly. Your business must be compliant with all VAT jurisdictions where your VAT is due. Also remember the new VAT rule that is applicable to distance sales (VAT due on place of consumption starting 1st July)
- Consider whether to register for One-Stop-Shop Scheme (OSS) or if you should keep your existing registrations. Please, notice that Sellers using OSS scheme cannot deduct or offset input VAT from other countries on their single OSS return.
- In case your business has been registered in OSS scheme, you must review if you should de-register for VAT purposes in those countries different than the one where your business is established.
- Non-EU distance sales Sellers planning to opt for this OSS scheme must appoint an IOSS intermediary who will be jointly liable for VAT due.
- Consider whether to register for Import-One-Stop-Shop Scheme (IOSS) or not.
- Online Sellers through marketplaces must review their transactions, speak to those marketplaces and to find out how to invoice them. Bear in mind that marketplaces will become the deemed supplier of the goods for VAT purposes. Starting 1st July, transactions through marketplaces will be splitted into 2 sales:
- A sale transaction between the online seller and the marketplace (Amazon, etsy) usually exempt from VAT.
- Another sale transaction between the Marketplace and the final private consumer becoming the Marketplace the deemed supplier, obliged to charge VAT to the customer, collect it and paying VAT due where corresponds.
¿Do you still need more information? ¿Do you want to make sure how does it work in practice?
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