New VAT rules for international e-commerce

This information is provided by

Netherlands Enterprise Agency, RVO

Effective date: 1 July 2021

What changes?

Do you have an online store? Do you supply goods through dropshipping? Do you sell goods or services to customers, who do not file VAT returns in other European Union Member States? There are new VAT rules for e-commerce.

Separate thresholds disappear

Previously, every EU country could set its own threshold amount for long-distance sales. These separate thresholds have disappeared and there is now 1 new threshold of €10,000. This threshold amount applies to all long-distance sales of goods and digital services to customers in the EU. If the total amount of sales of an EU-based company is less than €10,000 a year, they charge their own country’s VAT rate. Are your sales worth over €10,000 a year? Then you charge the VAT rate of the EU country where your customer lives.

No more VAT exemption for imported goods valued up to €22

Under previous rules, imported goods from non-EU countries were exempt from import VAT (invoer-btw) if the package had a value of €22 or less. This exemption no longer exists. As of 1 July 2021, all imported goods are taxed with VAT. Shipments with imported goods valued up to €150 are still exempt from import levies (invoerrechten). Read more about the import scheme and other VAT measures.

Platforms with an active role need to pay VAT

Entrepreneurs are responsible for paying the VAT on products they sell through an online platform. With the new VAT rules the online platforms are responsible for the VAT if the platform has an ‘active role’. An active role means more than just bringing together online supply and demand. For instance, enabling orders and payment of products. In that case, instead of the supplier, the platform delivers the products to private customers. Because of this, the platform pays VAT to the country where the customer resides.

The new rules apply in these situations:

  • distance sales of goods from outside the EU delivered in the EU with a value of at most €150 per shipment
  • goods that are sold from a storage in the EU by an entrpreneur who is established outside of the EU. In this case the value of the goods is irrelevant.

If this applies to you, a distinction is made in the delivery of:

  • the supplier to the platform: the supplier taxes the delivery with the 0% VAT rate, or taxes it in the non-EU country (if applicable)
  • the platform to the consumer: this means the platform charges and pays the VAT. They can use either the Import scheme (in Dutch) or the Union scheme (in Dutch)

For whom?

  • entrepreneurs that deliver goods or services to customers who do not file VAT returns in other EU countries.
  • platforms

When?

This change in regulations has come into force on 1 July 2021.

This information is provided by

Netherlands Enterprise Agency, RVO