EU e-commerce changes

07 Sep 2021

The EU e-commerce package came into effect on 1 July 2021, bringing with it a number of reforms in respect of the movement of goods from Northern Ireland to the EU and imports of low value goods into the EU or Northern Ireland. It also introduces new rules for supplies made through online market places. These are similar to the existing rules for online market places applying in Great Britain.

The changes will affect you if you:

• sell or supply goods from Northern Ireland to non-VAT registered customers in the EU;
• make supplies of goods from the EU to non-VAT registered customers in Northern Ireland;
• send low value goods to Northern Ireland or the EU from Great Britain or elsewhere outside the EU and Northern Ireland; or
• are a non-EU business with goods located in Northern Ireland at the point of sale.

The reforms also affect you if you operate an online marketplace that facilitates the sale of goods located in Northern Ireland or the EU by non-EU businesses to non-VAT registered customers in the EU or to Northern Ireland consumers, or from Great Britain to consumers in Northern Ireland and the EU.

New distance selling threshold

A new pan-European distance selling threshold of €10,000 (£8,818) applies from 1 July 2021. This replaced the previous thresholds of €100,000 and €35,000 set by each EU member state. The new threshold applies to the total cross-border sales by the business across the EU, rather than on a country-by-country basis as was the case before 1 July 2021.

One Stop Shop (OSS)

A new One Stop Shop (OSS) is introduced to prevent businesses falling within the scope of the rules from having to register in each EU member state in which they have customers. If you are a Northern Irish business selling goods in excess of the new €10,000 threshold to EU consumers, you can register for the OSS, rather than registering for VAT in each member state in which you have customers.

Abolition of Low Value Consignment Relief

Low Value Consignment Relief (which provided an exemption from import VAT for consignment of goods valued at less than €22 which were sold online to customers in the EU) was abolished with effect from 1 July 2021. This means that if you sell goods online to EU customers, you will now need to pay import VAT in the country in which the customer is based.

Import One Stop Shop (IOSS)

A new scheme, the Import One Stop Shop (IOSS), was introduced from 1 July 2021. The IOSS, which can only be used for consignments valued at €150 (£135) or less, allows registered businesses to collect the import VAT on B2C orders at the point of sale. If you register for the IOSS, you will then pay the import VAT that you have collected at the point of sale for each EU country each month via the IOSS.