New VAT Circular for E-commerce
The Belgian Tax Authorities published Circular 2021/C/72 concerning the VAT-treatment of cross-border B2C e-commerce activities (see NL / FR ). The new lengthy Circular of nearly 300 pages implements the new VAT legislation relating to the distance sales of goods and certain cross-border B2C supplies of goods and services, applicable as from 1 July 2021. Accordingly, the Circular is also effective as from 1 July 2021.
The new VAT legislation for cross-border B2C e-commerce activities was enacted in Belgium by Law of 2 April 2021 (see NL / FR ) and complemented by Royal Decree of 29 June 2021 (see NL / FR ). It implements the relevant EU legislation and, most importantly, introduced the following changes:
- extension of the existing simplified schemes (e. Union Scheme and Non-Union Scheme) within the MOSS-system (i.e. Mini One Stop Shop). As from the 1st of July 2021 also the intra-Community distance sales of goods and all services provided to foreign EU final consumers by EU suppliers (i.e. Union-Scheme) as well as all services provided to final consumers by non-EU suppliers (i.e. Non-Union Scheme) will be included. Due to the significant extensions of the MOSS-system, the system is now referred to as OSS (i.e. One Stop Shop');
- elimination of the domestic thresholds for intra-Community distance sales, and introduction of a global EU VAT threshold for intra-Community distance sales of goods and TBE services (e. telecommunication, broadcasting and electronic services) to final consumers. The global EU VAT threshold is set on EUR 10.000;
- introduction of a new scheme within the OSS-system (e. Import Scheme) which allows for a simplified declaration and payment of the VAT in respect of distance sales of goods shipped from third countries or third territories;
- abolition of the VAT exemption for the import of small consignments of max. EUR 22 of non-EU suppliers. This exemption is replaced by an import exemption of max. EUR 150 which applies only if the goods are imported under distance sales of goods from third countries or third territories, and are declared under the new simplified scheme of the OSS Import Scheme;
- introduction of special arrangements outside the OSS-system for the declaration and the payment of import VAT in respect of goods imported for final consumers under the distance sales of goods from third countries or third territories, when the VAT is not paid via the OSS Import Scheme;
- introduction of new rules whereby the operators of electronic interfaces facilitating distance sales of goods, are in certain cases also made liable for the correct payment of VAT on the distance sales effected through their interface.
Topics covered by the Circular
In line with the new VAT legislation, Circular 2021/C/72 provides further details and clarifications about the following topics (per section):
- explanation of the legislative framework and definition of terms used;
- rules applicable to the distance sales of goods imported from third territories or third countries, with the exception of excise goods;
- rules applicable to the intra-Community distance sales of goods as well as certain domestic sales of goods;
- rules applicable to services supplied by VAT taxable persons not established in the EU or by VAT taxable persons established in the EU but not in the Member State of consumption, to final consumers;
- commentary on special arrangements applicable to the aforementioned transactions;
- invoicing rules and accounting obligations specific to the aforementioned transactions;
- entry into force.
The Circular, in principle, does not cover the VAT obligations relating to B2B intra-Community supplies of goods, and B2B supplies of goods imported from third territories or third countries.
How can we help you?
If you perform cross-border B2C supplies, you are affected by the new VAT legislation as of 1 July 2021. Accordingly, you will likely need to take appropriate measures to ensure your compliance with the new rules. In that context, the new Circular provides further details and clarifications. As this Circular letter is nearly 300 pages long, it can hardly be studied in a few minutes. We are therefore assessing the practical implications of the new Circular for you in relation to your business activities. We recommend reaching out to us should you be concerned by the transactions that fall within its scope.