New Value-Added Tax (VAT) rules for online shopping came into force on 1 July last year as part of efforts to ensure a more level playing field for all businesses. Following its introduction, the new framework simplifies VAT compliance in relation to cross-border business-to-consumer e-commerce supplies and introduces greater transparency for EU shoppers when it comes to pricing and consumer choice. It also contributes to a fairer and simpler system of taxation in the EU, and to the modernisation of VAT in line with the realities of the e-commerce market.
The launch of the expanded ‘One Stop Shop’ (OSS) and newly introduced ‘Import One Stop Shop’ (Import OSS) allows businesses to declare and transmit VAT on their sales on goods and services within the EU, and on imports of low-value goods into the EU. Figures emerging following an ex-post evaluation of the first 6 months of application of the e-commerce package point to a successful implementation of the new rules.
In the first six months of operation, Member States collected €6.8 billion in VAT revenues via the expanded OSS portals. In addition to this €6.8 billion, over €2 billion in VAT revenues was collected on imports of low value consignments not exceeding €150.
Of those revenues on low value consignments, more than half – approximately €1.1 billion - was collected via the import OSS. Almost €700 million represented new VAT revenue, equating to €1.4 billion annually, generated by the abolition of the VAT exemption that previously applied to imports of low value goods not exceeding €22 and which was highly susceptible to fraud.
Separately, an estimated additional €270 million in VAT was collected as a direct result of the import OSS’s capacity to counter fraud and VAT losses due to undervaluation.
Visit the VAT One Stop Shop on our website.
- Publication date
- 23 May 2022
- Directorate-General for Taxation and Customs Union