From the 1st July 2020 there are new European Tax Rules for Online Marketplaces facilitating sales for suppliers across Europe. The newly implemented rules intend to simplify life for traders and introduce more transparency for customers. 

What has changed? 

Previously, goods imported into the EU valued at less than 22 EUR by non-EU companies were exempt from VAT. With the new rules in place, this exemption is lifted so that VAT is charged on all goods entering the EU – just like for goods sold by EU businesses. The new rule aims to generate fair competition and not to undercut EU competitors. 

E-commerce sellers previously needed to have a VAT registration in each Member State in which they had a turnover above a certain overall threshold, which might have varied from country to country. From 1 July, these different thresholds are replaced by one common EU threshold of 10,000 EUR, above which the VAT must be paid in the Member State where the goods are delivered. To simplify life and to make it much easier to sell into other Member States, online sellers may now register for an electronic portal called the ‘One Stop Shop' where they can take care of all of their VAT obligations for their sales across the whole of the EU. 

Once registered, the online retailer can notify and pay VAT in the One Stop Shop for all of their EU sales via a quarterly declaration. The One Stop Shop will take care of transmitting the VAT to the respective Member State.

Which impact does this have on Fy suppliers? 

For you as Fy’s supplier, the process has not changed. Fy will charge the customer the local VAT rate at checkout and pass it onto the respective local Government.