New European law for E-commerce
As of July 1st 2021, the European law will change for e-commerce entrepreneurs who sell their product to consumers within the EU. See also the Factsheet with regards to new VAT rules.
The new rules apply when you use your Dutch webshop and achieve an annual turnover of 10,000 euros or more by selling to consumers in EU countries, outside the Netherlands. If your anual turnover in other EU countries remains below 10,000 euros per year, you may continue to charge Dutch VAT.
What exactly does the change mean for Ecommerce?
On your webshop you calculate the Dutch VAT of 21% to all your customers, as soon as your sales to customers outside the Netherlands exceed 10,000 euros total, you must pass on the VAT that applies in the country of destination to your customer on your webshop. The 10,000 euro limit applies to all orders made by European consumers outside the Netherlands.
So if you have a customer in Germany, the VAT becomes 19% when you have already sold for more than 10,000 euros within the EU.
Dropshipping within Ecommerce
If you sell products through your website that you have delivered directly to the consumer through the supplier, you deliver your products via dropshipping.
When you purchase products from a supplier outside the EU, such as China, different rules apply as of 1 July. Before 1 July, all products under 22 euros are exempt from VAT. However, after 1 July, all imported products will have to be subject to VAT from the country of destination.
For example, when you deliver products from China directly from China to consumers in Belgium via your webshop. On this delivery you have to pay Belgian VAT. Then the threshold amount of 10,000 euros does not apply.
Up to 150 euros remains exempt from import duties when importing products, unless it is a product subject to additional rules. For example, alcohol and tobacco.
One digital office for the payment of VAT
All these different VAT payments to the different EU countries will be arranged from 1 July via a central counter. This is known as the one-stop shop or One Stop Shop (OSS).
Suppliers and sales platforms outside the EU can use the Import One Stop Shop (IOSS).
I’m a consumer, what does this mean to me?
As a consumer, do you like to buy products via AliExpress, Wish, Shein, Amazon or other large platforms? Then your packages will be 21% more expensive from July 1st, because you have to pay the VAT for these products this to the platform. Even if you ordered it before 1 July, you have to pay the VAT if the package arrives in the Netherlands after July 1st.
VAN EYCK ADVIES
Does your organization have to deal with input/ export and can you use advice when setting up good administration, delivery conditions, product requirements? Or do you want more information about the new ecommerce rules? Please contact VAN EYCK ADVIES for a non-committal interview on how I can be of service to you.