If you perform sales to final consumers of goods in the EEC, you should be aware that from July 1st, 2021 you will be affected by this change in the VAT rules for distance sales within the EEC.
Change in the VAT rules for Distance Selling within the EEC
From July 1st, 2021 onwards and as a result of the approval of RDL 7/2021 of April 27th, if your company makes deliveries of goods in which it is directly or indirectly responsible for transport to the final consumer, i.e. from Spain to a member state of the EEC, (or from one member state to the customer’s address of another member state), then the operative will be subject to the new rules of accrual and charging of VAT.
These transactions are very common within online sales. Until now, those sales have been taxed in the State of Origin of the selling company (where the products sold are located), unless the threshold established for each EEC Member State is exceeded, in which case they are taxed at the VAT rate of the country of origin of the customer's domicile. For more information, you can read our post VAT on Internet sales or e-commerce.
New VAT taxation regime for Distance Selling as of 1 July 2021
However, from 1st. of July 2021, a single threshold of €10,000 will be established for the whole EU, both for sales of goods and for the supply of services by electronic means, telecommunications, radio and television broadcasting. Therefore, if your company's sales exceed the EU-wide threshold (not on a state-by-state basis), the VAT taxation will become that of the place of destination of the goods. In other words, the VAT of the customer's country of domicile.
One-stop shop
In order to simplify the old distance sales regime (in force until the end of June 2021) and in accordance with the new limit, the Tax Agency has set up a system called "One-Stop-Shop". Through this system, the entrepreneur will be able to submit and settle the VAT due on all transactions involving the sale of goods to final consumers in the EEC. This will be done in a single declaration. Subsequently, the tax authorities will be responsible for transferring the VAT collected to each country.
If you have already been carrying out transactions with final consumers in the EEC, you will have to:
Determine whether you have exceeded this amount both in the current year and in 2020.
Register in this new "One Stop Shop" system during the month of June 2021.
Make quarterly VAT payments and accruals in each country where you sell through a single tax form for all countries. Form 369 applies.
Within our Tax Consultancy Department at Carrillo Asesores, we have set up a new department to handle, process and advise you on Distance Selling, register and manage the new VAT payment form. If you need more information, do not hesitate to call us.
Check with a simple click if you are affected by the new e-commerce VAT regulations:
