Changed to EU eCommerce VAT from July 2021

Changes came into force in July which mean UK suppliers selling goods to EU consumers online now need to account for VAT separately for every EU country they sell to. The European Commission aim to modernise cross-border VAT for eCommerce, to make life simpler and fairer for all and to combat VAT fraud.

Here’s a summary of the VAT changes from the European Commission website.

“The existing thresholds for distance sales of goods within the EU will be abolished and replaced by a new EU-wide threshold of EUR 10 000. Below this EUR 10 000 threshold, the supplies of TBE (telecommunications, broadcasting and electronic) services and distance sales of goods within the EU may remain subject to VAT in the Member State where the taxable person is established.”

The new EU VAT rules make a distinction between b2b and b2c services and mainly affect b2c sales. UK suppliers selling goods to EU consumers will need to be able to calculate and charge VAT on the website differently for each country in the EU. The relevant VAT code will need to be applied according to the country the goods are being shipped to.

For your b2b business, it may involve updates to your accounting system and eCommerce platform if you also manage b2c sales. Seek advice from your accountant to check your status.

If you’re looking for a b2b eCommerce solution that truly understands b2b selling and integrates well with existing systems, GOb2b can help. In addition to a fully designed eCommerce website, GOb2b is offering a fast-track solution that can be up and running in 4 weeks and requires no capital expenditure.