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A year after: results of 2021 EU VAT regulation reform for e-commerce

Almost exactly one year ago – on July 1, 2021 – the EU implemented a significant VAT reform oriented at online sellers. An ex-post analysis that evaluated the success of these structural changes after the first six months proved that the adjustments to the VAT regime have positively impacted the tax collection efforts across the EU.

The most considerable changes that sellers had to undergo last year were related to cross-border B2C sales, such as the taxation of low-value consignments by abolishing the VAT exemption for low-value imports. At the same time, the EU expanded the OSS and launched the IOSS schemes that helped international sellers register for and declare VAT in the EU (including the VAT for imported goods).

The first post-evaluation of the new regulation has shown that over EUR 6.8 billion were collected via the OSS scheme, with an additional EUR 2 billion coming from the taxes for shipments that do not exceed EUR 150. The majority of the taxes collected for low-value consignments (EUR 1.1 B) were submitted via the import OSS scheme.

Based on the analysis, almost EUR 700 million were additionally generated in the first six months due to the taxation of the low-value shipments. It is estimated that increased transparency with the OSS scheme might have resulted in approx. EUR 270 million of VAT collected.

Everyone at Vatabout is waiting for the final figures of the updated regime’s first year. We will keep you updated!

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