Since most goods and services are sold electronically or through distance selling, in online stores, on electronic platforms, there is attention to the application of VAT in e-commerce. How e-commerce is subject to VAT in the EU, this article is about that.

Full information taken from the EU e-commerce source. Here, we provide key landmarks.

When purchasing goods online from outside or within the EU, the same VAT rate applies as for goods purchased in the buyer's country of residence: VAT is paid where the goods are consumed.

Online sellers, including online marketplaces/platforms, can register in one EU Member State and this will be valid for declaring and paying VAT on all distance sales of goods and cross-border supplies of services to customers within the EU. Such registration occurs in the One Stop Shop (OSS).

The threshold for distance sales of goods within the EU is EUR 10,000. Below this threshold, supplies of telecommunications, broadcasting and electronic services and distance selling of goods within the EU may continue to be subject to VAT in the EU Member State where the taxable person is established.

Online marketplaces / platforms facilitating the supply of goods are deemed for VAT purposes as those who themselves received and supplied the goods (deemed supplier).

Measures have been established to simplify distance trade of imported goods in quantities not exceeding EUR 150 in case of non-use of the IOSS (special arrangements).

These rules apply to:

• Distance sales of goods within the EU by suppliers or deemed suppliers;
• Domestic sales of goods by deemed suppliers;
• Supplies of services by EU and non-EU sellers to consumers in the EU;
• Distance sales of goods imported from third territories by suppliers and deemed suppliers, except for goods subject to excise duties.

When selling goods or services online to customers in markets outside the EU, it is necessary to check export requirements, as with traditional sales channels. This site source contains useful information.

When selling small quantities to end consumers, de minimis rules apply. They often exempt low-value goods from duties and impose only minimal formal paperwork requirements.