Impacts and adjustments of VAT on European e-commerce

  • The new EU VAT regulations apply the tax based on the country of the consumer and not the supplier.
  • The Single Window is introduced to simplify the tax management of cross-border transactions.
  • Marketplaces are now responsible for collecting and reporting VAT from their suppliers in the EU.
  • The changes eliminate previous exemptions and affect both large and small businesses.

Importance of live chat for Ecommerce

Since the beginning of the year, a new series of rules and regulations have come into force with the aim of unifying the eCommerce in EuropeThese measures not only affect the scope of electronic commerce regulation, but also establish a Special regime for the taxation of VAT directed to telecommunications, broadcasting, television and electronic services companies, whose registration is voluntary.

Below, we will analyze the key points of this new regulation and how it impacts the European online stores, as well as in eCommerce sector in general.

Relevant changes introduced by the new regulations

Relevant changes to VAT in eCommerce in Europe

VAT: Application according to the consumer's country of residence

As of January 1, the IVA The rate applicable to the services sold must correspond to the rate in force in the European Union country where the consumer resides. In contrast to what was previously the case, the rate of the consumer can no longer be applied in the European Union country where the consumer resides. IVA from the supplier's country of origin, which requires companies to identify the exact location of their customers. This change aims to ensure fairer taxation and prevent unfair practices in the market.

Electronic invoice: New requirements

Since January 15, all e-commerce companies in Europe are required to issue Electronic bill when the consumer so requests, in accordance with the Electronic Billing Promotion Plan. This contributes to more efficient and environmentally friendly management of billing in the sector.

Data protection and Cookies Law

In addition to the changes in VAT, companies must comply with strict regulations on Data Protection and using cookiesThe General Telecommunications Law of 2014 establishes clear requirements to ensure security and transparency in e-commerce operations.

Impact of regulations on eCommerce and taxation

A study carried out by tax regulation experts, such as Taxamo, reveals that a large part of the European companies are not sufficiently prepared to deal with changes in VAT regulations, which can have significant economic and legal consequences.

The main obligations include:

  • Identify the consumer's country of residence, using at least two tests non-conflictive, such as IP address and credit card billing country.
  • Correctly apply the VAT rate corresponding to the consumer's country.
  • Store transaction information for at least 10 years.
  • Ensure compliance with all VAT regimes within the European Union.

Failure to comply may lead to significant sanctions, resulting in companies facing fines in Member States where tax regulations have been breached.

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This change aims to curb tax avoidance by large multinationals such as Amazon or Google, which benefited from reduced VAT rates in certain countries. However, it also affects small and medium-sized businesses. shops, which will now have to adapt to a considerably more complex system.

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Advantages and challenges of the One-Stop Shop system

To simplify the procedures associated with these new obligations, the European Union has introduced the system of Single window (One Stop Shop – OSS), which allows companies to declare and pay VAT on all their cross-border transactions through a single electronic portal.

Among its expected benefits The most notable ones are:

  • Elimination of the need to register for tax purposes in each country where sales are made.
  • Reducing the administrative burden for companies.
  • Greater transparency and traceability in transactions.

However, small businesses must overcome certain challenges, such as the need to understand the VAT rates applicable in each member country and adjust their sales platforms to reflect final prices with the correct VAT.

Changes in marketplaces and dropshipping

One of the highlights of this regulation is the responsibility which now falls on marketplaces such as Amazon or eBay to manage VAT on sales made on their platforms. From now on, marketplaces will be considered "sellers" for VAT purposes when non-European companies use their services to make sales to consumers within the EU.

This implies that:

  • Marketplaces must collect and report the relevant VAT on behalf of the supplier.
  • They must keep a record of all transactions for at least 10 years.

Regarding dropshipping, the new regulations also eliminate the VAT exemption on low-value imports (less than 22 euros), forcing the seller to pay VAT on all goods imported from countries outside the EU.

How to adapt to new regulations

To adapt to these regulations, companies can follow a series of key steps:

  1. Update your ERP systems to calculate VAT according to the destination country.
  2. Invest in training and training for your billing and taxation teams.
  3. Collaborate with tax advisors to ensure regulatory compliance.

online sales

These measures will not only ensure that the client not only avoid sanctions, but will also allow them to optimise their processes and improve their competitiveness in the European market.

The transition to a more unified and transparent tax system is a crucial step towards strengthening e-commerce in Europe. Although the initial challenges may be significant, compliance with these regulations will allow businesses to operate in a more competitive and fair environment.


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