From 1 January 2025, the EU is proposing a number of changes to reduce VAT compliance cost and the administrative burden of cross border trade within the EU.
There is to be a mandatory reverse charge rule for supplies of goods and services for all intra-Community B2B supplies where:
- The supplier is not established in the Member State in which the VAT is due, and
- The purchaser/recipient is VAT registered in that latter Member State, and
- The supplies do not fall within a margin scheme.
The VAT one-stop-shop (OSS) is to be extended to cover B2C-supplies of goods including domestic supplies, installation or assembly supplies, supply of goods on board of ships, aircrafts or trains and supply of gas, electricity, heating and cooling.
There will be new rules for Platforms trading across the EU. They will be the “deemed supplier” for all supplies of goods within the EU facilitated by them (they will be treated as having received and supplied those goods). This includes both B2C supplies of goods within the EU by EU-businesses operating on the platform and B2B supplies. Platforms that are established in one EU Member State and only facilitate supplies in that State will not fall within the “deeming provision”.
All Platforms must use the OSS and, in all cases, where the Platform is a “deemed supplier”, records must be kept about the suppliers whose sales the Platform has facilitated. This includes the name, postal address and electronic address or website of the supplier, its VAT registration or tax ID number and its bank account.
Call-off stock arrangements at present causes difficulties – placing stock within a member state prior to the goods being sold. In many cases, a VAT registration is needed to invoice and report the eventual sales and deal with imports/intra EU VAT. These rules will be abolished from 31 December 2024 although goods supplied under pre-existing arrangements can continue with the regime until 31 December 2025. As a result of the wider changes proposed to the OSS and the reverse charge rules, it should be possible to avoid a VAT registration and deal with the reporting of the movement and sales to businesses and consumers in other ways.
Second-hand goods supplied under the margin schemes, works of arts, collector’s items and antiques will be subject to distance selling rules making them subject to VAT in the Member State of arrival of the goods. If works of art or antiques are not transported or dispatched or the transport starts and ends in the same EU Member state the supply will be subject to VAT where the customer is established, has its permanent address or usually resides.