New VAT Obligations for Online Marketplaces – January 2021

The EU Parliament has approved an amending directive in respect of supplies made through online marketplaces. From January 2021, the online marketplace will be treated as the seller responsible for VAT on goods with a value up to €150 when supplied via their platform to customers in the EU by non-EU businesses. This is in contrast to the current rules which, under certain circumstances, do not require non-EU sellers to register and account for VAT in the UK. The purpose of the amendment is therefore an attempt by European Parliament to close VAT “loopholes” in respect of sales through online platforms.

The directive sets out rules for determining the place and time of supply, along with the specific information that platforms must collect and subsequently report in connection with suppliers and sales made.

Implementation of these new rules is still some way off but, as is usually the case with potentially significant changes to VAT law, it is worth considering now whether your business will be affected.

If you would like to discuss further, please contact a member of the Centurion VAT team at emailus@centurionvat.com