Since Friday 11 June, the European Football Championship has finally begun. 24 countries are again competing for the coveted title âBest of Europeâ and for the first time in history the matches are being played in 11 different countries and stadiums. Europe seems united! Who is your favorite? Personally, I think France will do very well, but the Germans are also traditionally one of the contenders for the title. Will it be French or German? Or is the Dutch lion loose and will the Dutch team go for it in the coming weeks??
In between all that football something else is happening in Europe: on 1 July the new EU regulation on VAT e-commerce will come into force.
Are you a Dutch entrepreneur and do you supply goods in the EU to customers who do not file a VAT return? If so, as from 1 July 2021 you will usually have to declare that VAT in the EU country where you deliver. For these supplies, you can start using the so-called One-Stop-Shop (OSS). This also applies if you supply services in the EU.
Delivering goods within the EU
Situation now
Do you supply goods that are already in the EU to customers in another EU country? And do those customers not have to declare VAT? Do you also transport the goods yourself or do you have them transported on your behalf? If you remain under the turnover threshold of the delivery country, you now calculate the Dutch VAT. You file the Dutch VAT return. And you pay Dutch VAT. As soon as your turnover exceeds the threshold per country, you calculate the VAT of the EU country where you delivered your goods. Each EU country has its own turnover threshold. The thresholds range from âĴ25,000 to âĴ100,000. An additional disadvantage of this current situation is the administrative burden of registration and declaration in the different countries. And not everyone speaks a good word of French or German.
Situation as of 1 July
The turnover thresholds per EU country will disappear. There will be one turnover threshold of âĴ10,000 per calendar year. This concerns the turnover of goods that are already in the EU. And which you supply to customers in other EU countries who do not have to declare VAT, such as private individuals. Moreover, you must arrange the transport of these goods yourself. Here you add to your possible turnover from digital services to private individuals in other EU countries. If this turnover is no more than âĴ 10,000, you calculate the Dutch VAT. You file the Dutch VAT return and you pay Dutch VAT.
As soon as your turnover exceeds âĴ10,000, you calculate the VAT of the EU country where you supplied your goods or digital services.
You may use the new Union scheme for your VAT return. This allows you to handle your VAT declaration and payment in one go within the one-stop-shop system every quarter.
How to use the Union scheme
You may use the âUnion schemeâ if you have registered with the tax authorities on time and the tax authorities have accepted your request. You are not obliged to participate in this scheme. If you do not participate, you simply declare the VAT in each country in which you supply your products. You should contact the tax authorities of those countries for this purpose or engage an advisor.
With the Union scheme, you report the VAT for all these supplies every quarter. And pay it in one go. The tax authorities will ensure that the correct VAT amounts end up in the correct countries. Incidentally, the Union Regulation does not regulate the reclaiming of input VAT.
You declare deliveries to Dutch customers in the usual way in your Dutch VAT return.
Registration
Do you need help in registering your company for the One-Stop-Shop method or in managing your VAT returns? Please feel free to contact me or one of my colleagues. The advisors at AAme Accountants and Tax Advisers will be more than happy to help.
I wish you a lot of fun watching football in the coming weeks and sincerely hope that the âHup Holland Hupâ will soon be heard throughout Europe again, instead of a little French or German. With the new VAT rules, Europe is in any case a little more united.