The Commission has launched proposals to modernise the VAT system for cross-border e-commerce. The proposals include setting thresholds of €10,000 and €100,000 for cross-border supplies of electronic services by 2018 and extending the Mini One Stop Shop for electronic services concept to all online supplies of goods and to all cross-border services to end-consumers in 2021.

The proposals include:

• New rules allowing companies that sell goods online to deal easily with all of their EU VAT obligations in one place;
• Simplified VAT rules for start-ups and micro-businesses selling online; whereby 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;
• Action against VAT fraud from outside the EU;
• Reduced VAT rates for e-publications such as e-books and online newspapers.

The Commission’s press release noted that these legislative proposals will now be submitted to the European Parliament for consultation and to the Council for adoption.