New VAT reporting for webshops

From 1 July 2021, new VAT rules take effect in the Netherlands for e-commerce, particularly online sales of goods to private consumers.

For some smaller webshops, Dutch VAT can continue to apply. The €10,000 simplification is subject to conditions, including establishment in one EU country and the combined qualifying sales remaining within the threshold in both the current and previous calendar year. Check the Dutch Tax Administration’s explanation for your situation.

The threshold

The separate thresholds for intra-EU distance sales to each country disappear from 1 July. They are replaced by a combined €10,000 threshold covering qualifying intra-EU distance sales and digital services to EU consumers. For the second half of 2021, the threshold remains €10,000; it is not reduced proportionately for the shorter period.

Once the threshold is exceeded, the VAT rate of the customer’s EU country applies, including to the sale that crosses the threshold.

You can also choose to apply destination-country VAT from the first qualifying sale, even below the threshold. Check the requirements for making that choice with the tax authority or your adviser.

How do you pay the VAT?

From 1 July, two main approaches are available:

1. Register for VAT in each relevant EU country. File returns and pay the VAT there, applying that country’s invoicing requirements.
2. Use the Union scheme through the One Stop Shop (OSS). Report qualifying distance sales through the Netherlands and pay the foreign VAT to the Dutch Tax Administration, which forwards it and the relevant information to the entitled Member States. Qualifying digital and other consumer services may also be reported through the scheme.

Practical webshop changes

Where destination-country VAT applies, configure product prices with the relevant VAT rate for the customer’s country. In the management system, add another country-specific price to each product and set its VAT percentage.

For more information, consult the Dutch Tax Administration. If you need help changing webshop prices or are unsure whether a change is needed, contact us and we will help you with the website configuration.