From July 1, the new EU rules on VAT for e-commerce take effect. We will walk you through the most important changes and the ones that may matter to our clients. We know the subject is factual and fairly dense, but if you own a webshop that supplies goods or services within the EU, it is essential to know the right rules.
What changes on July 1?
- The turnover thresholds disappear
Before July 1, different turnover thresholds apply per EU country. If your turnover exceeds the threshold of an EU country, you have to charge the VAT rate of the country you deliver to. Every EU country has its own threshold. From July 1, those thresholds disappear and a single universal threshold of 10,000 euros per calendar year takes their place. That threshold applies to supplying goods to customers in other EU countries who do not have to file a VAT return (private individuals, for example). If your total turnover stays below 10,000 euros, you simply file your Dutch VAT return. Is it more than 10,000 euros? Then you charge the VAT rate of the EU country you supplied.
- The VAT exemption for imports up to 22 euros disappears
Until the new rules take effect, you have a VAT exemption when you supply goods from outside the EU directly to private individuals inside the EU, as long as the value is 22 euros at most. That exemption is now being scrapped. From then on you always have to pay VAT on your supplies, at the rate of the country you deliver the products to. If you use the import scheme, under which you pay the VAT for all of your supplies in one go each month, you do not pay VAT on import. If the value of the supply is up to 150 euros, you may use the new one-stop shop system, which we explain below, and your shipment remains exempt from import duties.
- A one-stop shop system for a single combined VAT return
Another important change is the introduction of a one-stop shop system through the Union scheme. You then file a VAT return every quarter, paying all of the VAT at once. So you pay the VAT on all of your supplies within the EU in one go, instead of separately per EU country. You remit the VAT you owe abroad to the Dutch tax authorities (Belastingdienst), who pass it on from there. Supplies to Dutch customers are not included; you still file your regular VAT return for those. To be allowed to use this Union scheme, there are a few conditions you have to meet:
- The goods you supply are already in the EU and go to a customer in another EU country
- The goods go to buyers who do not have to file a VAT return, such as private individuals
- So-called margin goods (second-hand items bought without VAT), (virtually) new means of transport (cars or motorcycles, for instance) and installed goods (awnings, for example) are not allowed to use the scheme
- You arrange the shipping of your products yourself
What does this mean for you as a webshop owner?
First of all, it is important to check whether the rules apply to your webshop. Go through the following points: determine whether your turnover in EU countries (outside the Netherlands) is more or less than 10,000 euros. If you sell goods from outside the EU directly to private individuals inside the EU, some things are changing there too. Finally, you need to decide for yourself whether you can use the Union scheme and whether you want to, because it is not mandatory. You can find more information on the website of the Dutch tax authorities. If none of the above applies to your webshop, nothing changes for you.
