In 2017, the EU Council decided to gradually reform the framework for VAT compliance in cross-border e-commerce. The reason for the entry into force is primarily technological change and the increasing importance of online trading. The new regulation is primarily intended to simplify the taxation of turnover in e-commerce. The start date for the entry into force of the next stage was postponed from 01.01.2021 by a further 6 months, to 01.07.2021.
Reform of the turnover tax law - the most important points at a glance
Uniform threshold regulation
From 2021 onwards, the individual delivery threshold regulation will no longer apply. This is replaced by the distance selling regulation. In addition, a uniform threshold regulation of €10,000 per year for consignments of goods and certain services within the EU will come into force.
Distance selling regulation
In future, the sales tax of the country to which the goods are delivered will apply. Under the new rules, companies would normally have to register for VAT in the country of destination or abroad from the time of sale.
In order to simplify this and to avoid a registration obligation in (almost) all EU countries, the well-known "MOSS" procedure - Mini One Stop Shop - is to be extended in future and become the One Stop Shop procedure. With the MOSS, companies can register and pay foreign sales taxes on digital services via the German Federal Central Office. A VAT registration in another EU country due to the delivery of goods to another EU country can thus be avoided. Entrepreneurs can thus fulfil their VAT obligations in other EU countries from Germany.
You can also find further information in these two blog entries: