eBay: Notes on changes to EU VAT regulations in 2021

On March 10, eBay China’s official website released an announcement entitled "Notice on Changes to EU VAT Regulations in 2021". The announcement stated that eBay had informed sellers in 2020 that from July 1, 2021, the VAT regulations for goods imported into the EU and some goods within the EU will change. eBay will collect and pay the EU VAT based on the seller’s location, the value of the goods and the location of the goods .

At the same time, eBay also requires all sellers to provide tax-inclusive prices and separate VAT rates in their listings so that eBay can determine the correct amount of VAT to be collected. Cross-border sellers should evaluate the impact of the above changes on their business and prepare for these changes. eBay will continue to update relevant announcements on this topic, so sellers are advised to stay tuned.

In addition, sellers need to know that the EU will cancel the current VAT exemption for low-value goods imported into the EU with a value of no more than 22 euros from July 1, 2021, and the distance sales threshold for cross-border sales within the EU will also be abolished on July 1, 2021.

After July 1, the EU will make significant changes to the way VAT is collected on goods imported into the EU, on sales of goods within the EU by non-EU sellers, and on cross-border sales of goods within the EU by EU sellers, including:

1. Cancel the provision that low-value ( less than 22 euros) imported goods are exempt from import VAT;

2. For goods imported into the EU and sold to EU consumers with a value not exceeding 150 euros, e-commerce platforms or customs declarants may withhold VAT;

3. For sellers from non-EU companies, if the goods have been pre-stored in the EU and sold to consumers in the EU or sold from one EU country to another, the e-commerce platform may collect and pay VAT on their behalf.

The EU has very high compliance requirements, especially as the government deficit rose sharply in 2020 and the e-commerce industry developed rapidly. EU countries will also pay more attention to e-commerce VAT. Sellers are required to register for VAT as long as they use operations centers or overseas warehouses within the EU, sell goods to individual sellers in EU countries exceeding "remote sales", import goods to the EU, sell goods to corporate sellers in EU countries, and transport goods between operations centers in different countries.

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