Explore the new EU VAT rules

in a post-brexit market

An essential reform of VAT on e-commerce came into force on July 1, 2021. It will have a direct impact on exports from non-EU countries to European customers. UK businesses exporting to European customers need to be aware of this and adapt as quickly as possible. Watch the interview with Michael Boulanger, CEO of RM Boulanger, Tax Representative and VAT expert. Discover in 3min30 the main points to remember.

Published on 01.02.2022

What are the new rules
about VAT?

The country-specific VAT thresholds are removed: sellers now need to invoice and collect VAT in each country where their B2C EU sales amount to more than €10,000.
One-Stop-Shop portals has been implemented in each EU Member State so that local VAT will be collected through one unique point wherever the goods are sold in the EU,
VAT obligations are transferred from Non-EU based sellers to marketplaces, who have become liable for VAT payments. As a result, non-EU sellers have to specify when the marketplace manages the Value Added Tax for them, to avoid double collection. Marketplaces have to charge and collect VAT directly to the end clients and report it to the relevant Tax Authorities
The EU hopes these new rules will eradicate VAT fraud on sales to EU clients (estimated at around €5-7 billion annually).

Interview with
Michael Boulanger, President of RM Boulanger

Michael Boulanger French tax expert answered our questions regarding the post-brexit challenges related to that field. Here are the main topics we discussed:

“The country-specific thresholds, above which sellers must invoice and declare VAT, are reduced to €10,000. For example, in France the threshold was €35,000, but in Germany it was €100,000.”

If we take the example of annual sales to EU clients worth just twenty thousand euros, do I need to change the way I deal with value-added tax?

You certainly would need to be able to charge local VAT at the right rate. They are two available online portals to declare and pay EU VAT: the One Stop Shop (OSS) and the Import One Stop Shop (IOSS). Also, non-EU sellers to marketplaces are now liable for VAT payments and VAT are transferred from them.

Concretely how will this impact businesses selling to European clients?

Businesses are affected whether they sell goods from an EU warehouse or directly export goods from non-EU-countries to their European clients. Businesses are, however, not concerned if they only sell goods to professionals, on a B2B basis.

What can businesses do about this now? What are their options?

Several options are available depending on how the flows of goods are organized. However, we anticipate many complications for goods being exported from outside the EU and marketplaces not willing to be responsible for paying VAT, but solutions exist.

Discover the video interview

Hauts-de-France: the closest solution
for British companies

It is crucial to note that for simple operations after Brexit: import, export, purchases or sales, the easiest solution is fiscal representation. But, for more complex operations, such as multiple imports or re-export of goods, or multiple exports to several EU countries, the easiest solution is either to take up space in bonded warehouses or to set up a company on EU territory.

The Hauts-de-France region accounts for 23% of French real estate demand: 234,000 m² of take-up in 2020. The crucial aspect of this region is the potential for growth with 2.6 million m² to be built, thanks to the favourable climate of local authorities who are freeing up land. The year 2020 has seen a 48% increase in available supply in six months – an all-time high of 639,000 m².