We recently reported on new simplification measures coming into effect as of 1st January 2019 for business-to-consumer (B2C) suppliers of digital services.   From 1st January 2021, the second set of new e-commerce rules will kick-in, including the expansion of the MOSS scheme to distance sales of goods and the extension of VAT liability to electronic interfaces such as online marketplace or platform operators.

The Commission has now published detailed rules clarifying the situations in which online marketplaces will be made liable for VAT generated from cross-border B2C sales of goods within the EU.  This is part of the broader plan to recoup the EUR 5 billion of VAT via online sales.

Marketplace as “facilitator” of the supply

Under the draft provisions, if a marketplace falls within the specified definition of “facilitator” to a supply between users, the supply will be split into two separate transactions.  The supply between the marketplace and customer will be subject to local VAT because the marketplace will be deemed as the supplier of the goods traded on its platform.  This will result in the marketplace having to collect and pay the VAT on those sales.

This rule will generally apply to the following transactions:

  • Distance sales of goods from outside the EU in consignments of an intrinsic value up to EUR 150;
  • Sales of goods within the EU by a non-established sellers; and this includes
  • Sales of goods being stored by non-EU companies in warehouses or “fulfilment centres” within the EU.


Electronic marketplaces will be required to keep records detailing the information listed below about transactions carried out by sellers operating on their sites:

  • The name and address of the supplier whose supplies are facilitated via the electronic interface and if available:
  • The electronic address or website of the supplier;
  • The VAT identification number or national tax number of the supplier; and
  • The bank account number or number of virtual account of the supplier;
  • A description of the goods, their value and if available, the place where the dispatch or transport of the goods ends together with the time of supply; and
  • A description of the services, their value and if available, information to establish the place of supply and time of supply.

These measures were developed in consultation with both online marketplaces and Member States authorities. Now, the Commission is requesting quick agreement from the EU Council so that businesses may look forward to a smooth transition to the broader VAT system for e-commerce in 2021.

If you are affected by the above legislative changes or if you have any questions, please do contact us.

By |December 17th, 2018|