Ecommerce advocates: EU needs new VAT rules

Ecommerce Europe and EuroCommerce, the biggest branch organizations for European online retail, call on the European Union to issue a unified VAT registration. Companies that sell cross-border can already register for taxes via one EU-country. However, this does not apply to those stocking goods in multiple countries, the organizations say.

Branch advocates Ecommerce Europe and EuroCommerce voiced their concerns in a joint paper last month. Recently they also launched a new website advocating for a unified VAT-registration for online shop owners.

Rules do not include storage

As of July, ecommerce companies can more easily register, file and pay VAT-taxes for multiple EU-countries via just one member state. Although this has greatly simplified tax compliance for cross-border sellers, the branch organizations write, the so-called ‘VAT One-Stop Shop’ (OSS) is only meant for selling products or services to final consumers.

Companies that keep stock and offer fulfilment are not included.

This means companies that keep stock and offer fulfilment in multiple European countries are not included. These traders will have to register for VAT and file returns in every operating country, Ecommerce Europe and EuroCommerce write.

8.000 euros per year per country

According to the paper, this costs traders 8.000 euros per year for each country where stock is kept. The organizations call it costly and time-consuming. It takes approximately 100 days to register for a VAT number, the authors say, and up to 60 VAT filings per country per year.

It takes approximately 100 days to register for a VAT number.

Call for extension

Therefore Ecommerce Europe and EuroCommerce call for an extension of the VAT rules. The extension should apply to cross-border movement of inventory, according to the branch advocates, as well as domestic sales from a seller not established in that country.

This would ‘lower compliance costs’ and ‘reduce administrative burdens’, the paper reads, in particular for small to medium-businesses. “Equally important, it will allow EU traders to become more competitive in an increasingly globalised and omnichannel retail environment.”

Ongoing negotiations

Negotiations between the EU and stakeholders are still ongoing. The branch organizations write that they hope a revision will be implemented before 2023.

The branch organizations hope for a revision before 2023.

Ecommerce Europe represents over 100.000 retailers, while EuroCommerce accounts for six million companies as well as 31 national commerce federations. Online the initiative has garnered support from Dutch industry advocates like Thuiswinkel and trustmark WebwinkelKeur.