Delayed implementation of revised value-added tax regime for e-commerce

The European Commission intends to put back the implementation of the revised value-added tax regime for e-commerce by six months. The new regime is to simplify the system of value-added tax being charged on cross-border Internet sales of products and services to consumers, by having the value-added tax component levied in the country of destination while introducing identical competitive conditions for EU and non-EU based businesses. More often than not it will be the associated commercial sales platforms by which the value-added tax charged in respect of incoming transactions from outside the EU will be due and payable. The value added tax exemption for which the import of consumer products with an intrinsic value of less than 22 euros each is currently still eligible in the Netherlands is set to be abolished when the new regime takes effect.

The new value-added tax system will enable entrepreneurs to register and file for value-added tax in a single Member State, for rerouting by that State to the other tax and customs organisations throughout the EU. A similar one-stop shop facility will be available for the supply of products and services within the EU. The implementation of the myriad of standards and procedures the new system entails has been putting such a burden on the IT systems of the tax authorities in the various EU Member States that several Member States have come to question their ability to have the new system up and running by the first of January 2021, this being the original target date.

The Dutch Tax and Customs Administration is currently looking into the how and when (what effective date) of the implementation – inclusive of the accompanying IT systems – of the e-commerce package. The Junior Finance Minister in charge in response to Lower House questions has affirmed not to see any scope for the introduction effective the first of January 2021 of value-added tax charges on parcels of Chinese origin as had originally been intended, as it will take more time to get the Administration’s IT system ready for the expected sizeable increase in value-added tax returns submitted for processing.

Dutch version: Uitstel invoering nieuwe btw-regels e-commerce