VAT on Cross Border Supplies

The European Commission have put forward a series of proposals with the intention to facilitate cross border trade as a whole and combat cases of VAT fraud in relation to these supplies.

Included in these proposals are potential thresholds, due to be introduced in 2018, for cross border supplies of electronic services. Once introduced, these thresholds specify that only businesses with cross border sales exceeding EUR 10,000 will need to account for VAT under the standard rules. It is intended that these thresholds will assist microbusinesses and small and medium-sized enterprises who provide electronic services throughout the EU by only requiring them to account for VAT on their supplies once these thresholds are exceeded.

Additionally, further measures set to be introduced in 2021 that will extend the concept of VAT MOSS which currently applies to electronic services to include online supplies of goods, all cross-border services to non-business persons, and will also extend to imports into the EU, allowing these goods to benefit from a fast-track customs mechanism. The expansion of VAT MOSS will mean that distance selling thresholds that currently apply in EU countries will be no longer be considered.

To discuss these proposed changes in further detail and to determine what impact, if any, they may have on your business, please call our free VAT helpline today.

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