New VAT rules for the e-commerce industry will apply as per July 1, 2021, specifically for deliveries inside the EU. This raises many questions. We spoke with Duy Nguyen, CEO at Blue Turtle Tax and posed him a few questions.
“Currently it is obliged for B2C e-commerce organisations to calculate taxes in the country from which a product is shipped. For example: you sell from the Netherlands to a German consumer, then you will need to calculate 21% Dutch VAT. However, if you cross a sales threshold in a specific year, then you will need to calculate VAT following the VAT in the buyer’s country. As in the previous example: if you would cross the 100,000 EUR threshold per year, then you will need to calculate 19% German VAT from the moment you exceed 100,000 EUR in sales to German customers.
The threshold differs per EU country. The threshold in Belgium for example is 35,000 EUR. This causes a lot of administrative work, because you need to register for VAT in each consumer country, submit VAT declarations and pay VAT to the respective tax authorities.
An extra requirement is applicable to pan-European FBA sellers. They also need to register and apply for taxes in the countries where they keep stock.”
“We are practical-oriented tax experts with knowledge and experience in e-commerce and supply chain. Should you have any questions, or don’t know how to proceed after your check, we are here to help you to prepare for these changes and help you get the most out of these new rules.”
Blue Turtle Tax offers VAT, consultancy and technology services for companies. They help their clients to have everything in place and to be well prepared for the future with their profound knowledge, strong experience in multiple industries and an excellent service.