Home Business Insights & Advice How will the new VAT rules of e-Commerce 2021 affect your business?

How will the new VAT rules of e-Commerce 2021 affect your business?

by John Saunders
9th Aug 21 11:55 am

On the 1st of July 2021, all the value-added rules were subjected to change. The alteration only pertained to B2C businesses which did business on a global scale. The sole purpose of updating the rules was to demolish the problems that occur during international sales. It aimed at providing a better and simplified line of action for sales that were made across international borders. Additionally, it included the aspect of consignments that had a lower value.

Changes in the VAT rules e-Commerce 2021

The changes brought forward in the VAT rules were to increase the simplification of business deals that were made internationally. Therefore, let us look at all the changes that were brought forward.

  • A collective minimum cap was introduced for lesser valued consignments to be 10.000Euro.
  • The distance threshold for selling products internationally was removed.
  • One-Stop-Shop (OSS) was launched, which was done to expand the Mini One Stop Shop (MOSS).
  • An improved IOSS was brought forward which aimed at demolishing the import VAT for low valued consignments.
  • Now the sellers that sell their products on the e-commerce websites were made responsible for calculating the VAT amount and then reporting it further.
  • All the e-commerce platforms that dealt directly with the customers were issued a new set of rules that were specifically maintained for international sales.
  • When the business owner does not use the IOSS (import one-stop-shop), for consignments that are valued below 150 Euro. New and refined rules were issued, which simplified the transaction and retailing services for the product. This ensured that a percentage has to be paid even for lesser valued consignment.

Reasons to change the VAT rules

The VAT rates across the globe vary from country to country. Also, the minimum consignment values remain different, which made collection and reporting of VAT for International deals very difficult. Therefore, to remove this complexity and provide a minimum threshold to the VAT reporting, new and improved rules were issued.

With this small change, the Member States can collect a VAT amount of 7 billion Euros every year. It will also create transparency among the E-commerce business, while they are doing business on a global market. Read more about Vat rules e-Commerce in 2021, to learn more.

How will the VAT changes affect your business?

As of now, it is predicted that the business organisations that dealt with international markets will be benefitted. Therefore, let us understand the effects the changes will bring forward.

  • The local EU businesses will gradually experience an increase in revenue, as the VAT processing will become more transparent, and will reduce any chances of fraud.
  • All the constraints that were previously caused due to different VAT rules, will become simplified, and the VAT collection will become impartial and reasonable.
  • Every E-commerce business will pay the same VAT rate even if they are not registered in the country. It removes the risk of fraud and simplifies that VAT will be collected in case of an online business transaction. Additionally, if you want to learn more about businesses administration, follow the Company Guide to learn more.


The new VAT rules are benefitting every e-commerce business, as well as the revenue of local EU businesses. Therefore, to conclude, the new VAT rules of Ecommerce 2021, will have a positive on your business.

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