The EU Commission has provided its latest update to follow on from the VAT Action Plan which was published earlier this year.
The legislative proposal from the Commission sets out the following:
- Cross border sales of goods being subject to a threshold of €10,000. For sales up to €10,000 the supplies will be subject to local VAT – once the threshold is exceeded they will become subject to VAT in the country where they are delivered;
- The abolition of the current distance selling regime and thresholds;
- Increasing use of the Mini One Stop Shop (MOSS) so that in addition to VAT on B2C sales of certain services, VAT due on B2C sales of goods could also be declared via it;
- Low Value Consignment Relief will be removed; and
- EU Member States will be able to tax e-publications at the same reduced VAT rate that applies to their physical counterparts
At the moment the draft legislation states that the changes to the distance selling rules and use of the MOSS for B2C sales of goods will not have effect until 1 January 2021. However, no further details have been released and hence we will have updates as they occur.