Advances in VAT: e-commerce of goods and services supplied to individuals (B2C) and definitive system for intracommunity trade of goods between businesses (B2B). Background and legislative changes 2019-2022

Abstract

On December 5, 2017, the Council of the European Union adopted Directive (EU) 2017/2455 (known as the VAT Directive on electronic commerce) which amends the VAT Directive to extend the scope of application of the Mini One Stop Shop, effective from 1 January 2021, to all services provided to individuals, as well as to intra-community distance sales of goods and distance sales of goods imported from third territories or countries, turning the Mini One Stop Shop into a One Stop Shop. In addition, under the new rules, certain operators who own electronic interfaces will be involved in the declaration and payment of VAT on certain distance sales.

Subsequently, on December 11, 2018, the European Commission published two proposals for amending the VAT Directive and the European Implementing Regulation developing some of the measures introduced by the VAT Directive on electronic commerce. Both proposals, which have received the approval of the Council of the European Union at its meeting on March 12, 2019, will also apply from January 1, 2021.

In parallel, on May 25, 2018, the European Commission published a proposal for a Directive amending the VAT Directive, regarding the introduction of detailed technical measures for the operation of a definitive VAT system for intra-community trade of goods between businesses. The entry into force of this definitive VAT system is scheduled for July 1, 2022.

Meanwhile, with effect from January 1, 2020, Directive (EU) 2018/1910 and Implementing Regulation (EU) 2018/1912, provide certain specific measures, which harmonize and simplify certain provisions of the current system which applies to intra-community trade of goods between businesses.