| European Commission - Press release |
Commission proposes new tax rules to support e-commerce and online businesses in the EU
Brussels, 1 December 2016The European Commission has today unveiled a series of measures to improve the Value Added Tax (VAT) environment for e-commerce businesses in the EU. Our proposals will allow consumers and companies, in particular start-ups and SMEs, to buy and sell goods and services more easily online.
By introducing an EU wide portal for online VAT payments (the 'One Stop Shop'), VAT compliance expenses will be significantly reduced, saving businesses across the EU €2.3 billion a year. The new rules will also ensure that VAT is paid in the Member State of the final consumer, leading to a fairer distribution of tax revenues amongst EU countries. Our proposals would help Member States to recoup the current estimated €5 billion of lost VAT on online sales every year. Estimated lost revenues are likely to reach €7 billion by 2020 and it is essential that we act now.
Finally, the Commission is delivering on its pledge to enable Member States to apply the same VAT rate to e-publications such as e-books and online newspapers as for their printed equivalents, removing provisions that excluded e-publications from the favourable tax treatment allowed for traditional printed publications.
Today's proposals embrace a new approach to VAT for e-commerce and follow up on the commitments made by the European Commission in the Digital Single Market (DSM) strategy for Europe and the Action Plan towards a single EU VAT area.
In particular, we propose:
- New rules allowing companies that sell goods online to deal easily with all their EU VAT obligations in one place;
- To simplify VAT rules for startups and micro-businesses selling online, VAT on cross-border sales under €10,000 will be handled domestically. SMEs will benefit from simpler procedures for cross-border sales of up to €100,000 to make life easier;
- Action against VAT fraud from outside the EU, which can distort the market and create unfair competition;
- To enable Member States to reduce VAT rates for e-publications such as e-books and online newspapers.
These legislative proposals will now be submitted to the European Parliament for consultation and to the Council for adoption.
