From 1 July 2021, the VAT rules in the EU will change for companies that supply products to clients who do not complete a VAT return, such as private individuals. The changes are specifically aimed at companies with an annual total turnover of more than € 10,000, in other EU countries and comapnies that supply products from outside the EU. In this item you will read more about the changes and we will tell you about the arrangements to restrict the administrative burden as much as possible.
This will change
Currently, the rule is that you calculate the Dutch VAT percentage for foreign deliveries to private individuals – or other recipients who do not have to submit a VAT return – in the EU. Depending on the product type, this is 9 or 21%. Each EU country has its own turnover threshold. If you exceed this turnover threshold, you should not use the Dutch percentage, but the VAT percentage of the relevant country. You then also file a VAT return in this country. To be able to submit a VAT return, you need a VAT number in the relevant country.
The following changes in the EU VAT rules come into effect from 1 July 2021:
Turnover threshold throughout the entire EU
From 1 July, a turnover threshold of € 10,000 applies throughout the entire EU. Are your products located in the EU and do you sell more than € 10,000 annually to customers in other EU countries who do not have to submit a VAT return? Then from 1 July you must calculate the VAT rate of your customer’s EU country and submit a VAT return in that EU country or make use of the Union scheme. This scheme is part of the OSS system that is explained below.
VAT exemption on imports expires
The VAT exemption for goods up to a maximum of € 22 that you import from outside the EU will lapse. Do you sell goods from outside the EU directly to customers in the EU who do not submit a VAT return? In that case, you must declare that VAT in the country of your customer from 1 July 2021. You can use the Import Regulation to simplify this VAT return. This scheme is also part of the OSS system.
Do you sell products via online platforms and are your goods not yet in the EU at the time of sale? With a value of up to € 150, the relevant platform will handle the VAT.
You can read more about the changes on the website of the Dutch government.
The One Stop Shop system
It is important for you as a seller to calculate the correct VAT percentage to your customers and to file a VAT return in the correct country. Failure to do so could result in annoying fines. To avoid having to register with the tax authorities in all countries where you deliver, a new One Stop Shop / One Stop Shop system will be introduced from 1 July. This system allows you to handle VAT notifications and payments on your deliveries for all EU countries in one go. Depending on your situation, you can make use of the Union scheme or the Import scheme. Click here for more information.
Take the required precautions
Make sure you take the right precautions now! Do you still have questions? Please contact us. We are happy to help you!