Adoption of Commission’s proposals by the Council

On December 5th, 2017, the Council adopted the Commission’s proposals.

The new rules, which will enter into force gradually by 2021, aim to simplify VAT rules and prevent fraud.

Thus, below the annual threshold of EUR 10 000 for cross-border online sales to individuals, a company will be able to continue to apply the VAT rules of its home country. SMEs will benefit from simpler procedures, in particular with regard to invoicing rules, for cross-border sales of up to EUR 100 000 per year. These measures will come into force by January 1st, 2019.

For the first time, it is planned to hold intermediaries responsible for collecting VAT on sales made on their platforms to EU consumers.

The exemption from VAT for imported goods with a low-value (EUR 22) from third countries will be abolished.

The one-stop-shop for online sales of goods between Member States (distance sales) should enter into force in 2021, so that Member States have sufficient time to update the IT systems underlying the system.

In addition, the agreement reached on December 5th, is also a further step towards a definitive solution establishing a single VAT area in the Union, with new rules, in particular on supplies of goods between Member States by taxable persons (click here).