The changes will require merchants to identify where their end customer is located by collecting two pieces of non-conflicting evidence and then applying the correct VAT rate. There are additional compliance obligations around reporting VAT receipts, storing information on VAT transactions for ten years and ensuring compliance with the various VAT regimes across the EU. E-service merchants who do not comply with the new rules are liable for penalty in the jurisdiction of the Member State in which they have infringed on VAT laws. HMRC has estimated that some 42,000 UK-based online merchants will be affected by the new rules and a sizeable portion of these will be SMEs, many of whom don?t currently have to register to pay VAT in the UK. However, as there is no minimum threshold applied to the new rules, and given that the existing VAT registration threshold in the UK is ?81,000, thousands of small businesses will now be brought into the VAT net. Related:EU VAT changes – Wake up and smell the coffeeBy Shan? Schutte
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.