The Netherlands – new VAT rules for international e-commerce
Published on April 29, 2021
On 1 July 2021 new EU VAT-legislation will be implemented concerning international e-commerce. These new rules will have a big impact on companies with “distance sales”.
This is the case, when the following conditions are met:
- The goods are transported to consumers (private persons or businesses without a VAT-number) in another EU-country then the seller’s country of establishment.
- The seller is involved in the transportation of the goods to the consumer.
- The seller has a revenue of at least €10,000 per annum from selling goods or digital services to consumers in other EU-countries.
If these conditions apply, all deliveries to consumers in the EU are taxed for VAT purposes in the EU country of the consumer. Therefor when the goods are transported to consumers in The Netherlands, the seller would have to register and pay VAT in The Netherlands. Fortunately the EU legislators have introduced an administrative facilitation, called the (I)OSS. With the (I)OSS one VAT return can be filed for all of the distance sales to consumers in the EU. In addition, the VAT exemption for the importation of small consignments up to a value of € 22 will be abolished. However when the IOSS-number is used a VAT exemption still applies for the importation of consignments to EU consumers with a value up to €150.
Companies established outside of the EU can register for the (I)OSS in a country of choice. They will need to appoint an EU established intermediary. The Netherlands is a great choice for the (I)OSS-registration. This way a company can benefit from our Dutch import VAT ‘exemption’ regarding the importation of goods that are not covered by the IOSS.
If the (I)OSS scheme is used, the Dutch-VAT still needs to be calculated based on the Dutch VAT-rate. However it can be difficult to determine which foreign VAT-rate applies. Flynth can assist with this and any other Dutch VAT obligations that a company might face due to the new legislation.
Jessica van Oosten