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2021 VAT e-commerce package - Business needs certainty and transparency

14 Feb 2020
All Committees
Customs & Trade Facilitation
Trade & External Affairs

On Thursday, 13 February 2020, AmCham EU sent a letter to Stephen Quest, Director General of DG TAXUD, requesting greater transparency on the progress of the 2021 VAT e-commerce package and its implementation. This comes following the instruction of the European Council to the European Commission to complete an assessment by the end of 2019 of the EU’s readiness to implement the changes necessary to meet the 1 January 2021 deadline.

Throughout its development, AmCham EU members have closely followed and contributed to the discussions on this piece of legislation and now with a deployment window of less than 11 months, it is vital that the business community is provided with a clear communication of the state of implementation.

Designed to level the playing field for EU businesses, shipments imported into the EU with a value below €22 will be subject to a value-added tax (VAT) as of 1 January 2021 and will require individual customs declarations. A new optional simplification measure, the Import One Stop System (IOSS) for low-value shipments between €0-150 would allow ‘deemed suppliers’ to collect and remit VAT at the point of sale, moving the collection process away from the border and enhancing the customer experience. A green lane channel approach that includes VAT and customs would make the use of IOSS more attractive for vendors, marketplaces and consumers.

Taking into account these proposed changes and the inevitable consequences they will have for business, AmCham EU called for clarity on the following issues:

  • The readiness of EU Member States to implement the Super Reduced Data Set (SRDS);
  • The implementation design for IOSS and Special arrangement procedures and capacity readiness;
  • The functioning of an interface between Express and Postal Services and customs authorities; and
  • Practical information and options on VAT postponed accounting in the Member States.

AmCham EU regrets that Member States are not transparently sharing their readiness to deploy the required comprehensive processes and IT solutions for the upcoming VAT and customs changes, since this prevents businesses and relevant stakeholders from developing properly designed IT and other tools that will ensure a smooth transition of the new rules. A harmonised approach at the EU level would ensure that businesses are not faced with different implementation solutions in different Member States.

The US business community stands ready to discuss these issues in more detail and we look forward to helping to deliver a successful implementation of the new rules and to ensure the best possible outcome for all stakeholders.

Read the letter