Changes to VAT import regulations for the EU in 2021

From 1 July 2021 the VAT collection regulations on e-commerce in the EU changed. From now on eBay collects and remits VAT on goods which are sold in the EU based on seller location, consignment value and item location.

Formerly applicable rules and thresholds on VAT exemption for import into the EU and cross-border sales in the EU are now abolished.

See if you need to take any actions

1. If you list on ebay.com or any other international eBay site, apart from ebay.co.uk or international eBay sites in the EU*, no additional actions are needed when providing the item price.
2. If you list on ebay.co.uk or any international site in the EU*, the gross price of the item including VAT has to be displayed to buyers in the EU and UK.

• If you own a Private account, no additional actions are needed. eBay will automatically calculate and add the appropriate VAT rate to your item price, which will be thereafter remitted to tax authorities. The gross price of the item will be displayed to the buyer during checkout.
• If you own a Business account, you can choose one of the following options when listing:
  • provide the item net price and leave the VAT field empty — eBay will calculate and collect the tax based on seller location, consignment value and item location;
  • provide the item gross price and VAT rate which was used to calculate the gross price in the proper field.

After 1 July 2021, for orders up to a consignment value of €150 imported into the EU, always provide to your carrier the Import One-Stop Shop (IOSS) number provided by eBay on the shipping label. The IOSS number will be available in eBay order in the field Consignee Address. Otherwise your buyers may have to pay VAT again on delivery. For transactions where eBay has collected VAT, eBay will issue an invoice to the buyers confirming the VAT amount charged and showing eBay’s IOSS number. If the buyer is asked to pay VAT again on import of the goods into the EU, please inform the buyer to check the invoice and share it with customs. You can also share the order details with the buyer where eBay’s IOSS number and the VAT amount collected by eBay will be visible.

For orders above the consignment value of €150 eBay will not collect VAT, and the buyer will have to pay it on the shipment delivery.

If you make sales to non-VAT registered buyers in any of the EU countries, and the combined total of these sales exceeds €10 000, you will need to collect VAT in all EU countries based on the delivery address. To do this, you will either have to register for VAT in each of the EU countries where you make sales, or use the EU VAT One Stop Shop.

Please contact your tax adviser on the matter of VAT accounting treatment when filing tax returns.