Online marketplaces will be liable for collecting VAT

Measures to pave the way for a smooth transition to new VAT rules for e-commerce that come into force in January 2021 have been announced by the European Commission.

From 2021 large online marketplaces will be responsible for ensuring that VAT is collected on sales of goods by non-EU companies to EU consumers if the transactions take place on their platforms. This will ensure that goods sold from storage facilities within the EU will have the correct VAT charged even when they are technically being sold to consumers by non-EU businesses. Currently it can be difficult for member states to obtain the VAT due on goods sold from so-called fulfilment centres.

Forming part of the EU’s agenda to tackle VAT fraud and to improve collection of the tax...