Changes to VAT import regulations for the UK and EU in 2021
When: from 1 January 2021 in UK, from 1 July 2021 in EU
Changes to VAT treatment of imports into the UK
UK VAT rate is 20%.
From 1 January 2021, the UK will introduce a new model for imports to ensure goods from outside of the UK are treated in the same way as goods already in the UK.
The changes at a glance
- The current VAT exemption for imports of goods in small consignment of a value of up to £15 into the UK will be abolished.
- eBay will collect and remit VAT on items and consignments up to a value of £135 imported into the UK and sold to consumers.
- In cases where the seller is a non-UK business and the goods are already in the UK, eBay will collect and remit VAT for supplies of goods sold to consumers within the UK.
- If the buyer is a UK VAT registered business and provides their valid UK VAT registration number, the responsibility to account for VAT will switch to the UK VAT registered business customer.
- All sellers from EU will have to provide a gross price and separate VAT rate on their UK listings, so that eBay can determine the correct amount of VAT to collect from consumers. For non-EU/UK sellers eBay will calculate VAT automatically.
- All prices will be displayed inclusive of UK VAT. Where eBay is responsible for collecting VAT, this amount will also be shown separately at checkout.
Changes to EU VAT for cross-border e-commerce
There are different VAT rates applied in different EU countries. Check details on the European Commission official site.
From 1 July 2021, the EU will introduce significant changes to how VAT is collected on imports into the EU, supplies within the EU by non-EU sellers and cross border supplies by EU sellers.
The changes at a glance
- The current VAT exemption for imports of goods small consignment of a value of up to €22 into the EU will be abolished.
- eBay will collect and remit VAT for imports of consignments up to a value of €150 shipped into the EU and sold to consumers.
- For goods where the seller is a non-EU business but the goods are already within the EU, eBay will collect and remit VAT on sales to consumers within EU countries, and from one EU country to another.
- The current distance selling thresholds for intra-EU cross-border supplies will be abolished.
- All sellers will have to provide a gross price and separate VAT rate on their listings, so that eBay can determine the correct amount of VAT to collect from consumers.
- EU sellers with an annual turnover of more than €10,000 for their complete intra-EU cross-border supplies will have to charge the VAT of the EU country of delivery.
As eBay is preparing for these changes, cross-border trade sellers should also assess the impact on their business and prepare for the changes. Please contact your tax adviser for questions on your VAT obligations.