At the end of the Brexit transition period, the eCommerce Directive no longer applies to the UK. Both UK and EU online businesses need to prepare now.

The UK Government will completely remove the E-commerce Directive’s country of origin rules from UK legislation. As a result, new rules may apply for online service providers in the European Economic Area (EEA) when the Brexit transition period ends on 31st December 2020.

The eCommerce Directive currently allows EEA online service providers to operate in any EEA country, while only following local VAT rules in their country of establishment. However, this is to no longer apply to EEA online service providers from 1 January 2021. The UK will bring these providers into scope of the new pending local VAT rules.

Depending on the nature of the services provided, businesses could already be following the rules. So this will have little impact at the end of the eCommerce Directive in the UK. Please note that this directive does not include areas such as:

  • Tax;
  • Gambling activities;
  • GDPR;
  • Safety standards and labelling;
  • Rules relating to transport of goods.

Next Steps

Online businesses need to consider whether the services they provide are currently in scope of this directive. If so, take action where necessary to remain VAT compliant in the UK and other EEA countries that you operate in.

Brexit Impact Reviews

Say “Adieu” to Brussels and trade rules as we know them. Businesses need to rise to the challenge to get Brexit ready; to review your supply chains and VAT position in preparation for trade as, or with, a country outside the EU.

A Brexit plan-of-action will protect your valuable supply chains and allow you to continue to trade confidently across Europe. We provide key considerations to allow you to make informed decisions and ensure minimal disruption to your trade post-Brexit. Find out more about our Brexit offering.

By |August 2nd, 2020|