Jun 02, 2021

Position Paper

Ecommerce Europe publishes its position paper on Single VAT ID

On 31 May, Ecommerce Europe published its Position Paper on the Single EU VAT Registration, anticipating the publication of a single EU VAT ID Proposal from the European Commission in 2022. The Paper builds on the entry into application of the VAT One-Stop Shop (OSS), which is a flagship of the European Commission’s work to modernise, simplify and strengthen the EU VAT system.

As set out in the VAT E-commerce Package, the OSS will become operational as of 1 July 2021 and allows businesses to register for VAT, file VAT returns and pay for the VAT due in multiple EU countries, via just one EU country. This is a fundamental and concrete simplification of the overall complex VAT system for businesses.

However, the OSS can only be used for sales of goods or services to final consumers (B2C) by those EU businesses that sell cross-border within the EU, not by those that store and fulfil stock locally in several EU states. Obtaining multiple VAT registration numbers is proven to be a significant burden for businesses, requiring them to go through lengthy and costly processes in the various Member States, where for each country they need a VAT registration number. These complexities have an adverse and damaging effect on EU cross-border trade.

In this context, Ecommerce Europe has published its position paper to prioritise the Single VAT Registration proposal which the European Commission has announced in the Fair and Simple Taxation Package but will publish in 2022/2023. Having a simple VAT ID would extend the existing VAT OSS to all shipments of merchandise where the seller of record is not located in the EU country of taxation. Ecommerce Europe believes that this initiative should be tabled as soon as possible, and in any case no later than 2022, in order to complement the VAT OSS and enable businesses selling online to have a unique VAT ID and report all the VAT through the single digital VAT portal.

Ecommerce Europe and its members stand ready to support the European Commission in its preparatory work leading to the publication of a legislative proposal introducing a single EU VAT registration. For any questions on our contribution, please contact us or visit our website.