2021 changes to VAT regulations in UK and EU

Important changes for sellers involved in cross-border e-commerce

VAT treatment of imports into the UK

From 1 January 2021, eBay will be legally required to begin collecting and remitting VAT for UK imports. From that date, eBay will have to charge buyers the applicable VAT amount directly and remit this sum to the relevant authorities

UK sellers trading domestically and all sellers trading with UK buyers and listing on the UK or any EU site will need to provide both gross prices as well as the applicable VAT rate used to calculate the gross price on all listings.

We strongly urge sellers listing on eBay.co.uk or other European eBay sites to specify the applicable VAT rates on existing listings as soon as possible. All new listings should include a VAT rate. You will find the field for the VAT rate beside the price when you create or edit listings.

If you don’t have an EU or UK VAT ID, then simply enter 0% beside the price when you create or edit listings. If sellers do not specify gross price and VAT rate, or if sellers specify a VAT rate of 0%, eBay will assume that the price provided is the net price (i.e., the item price excluding VAT), and eBay will calculate the gross price that is displayed to buyers.

The changes at a glance:

  • From 1 January 2021, eBay will start to collect and remit VAT for UK imports on all consignments with a value of up to £135. There will no longer be a VAT exemption for small consignments up to £15.
  • In cases where the seller is a non-UK business and the goods are already in the UK, eBay will collect and remit VAT for goods sold to consumers within the UK, regardless of their value.
  • Sellers should begin listing the applicable VAT rates on all their existing and new listings as soon as possible.
  • From 1 March 2021, eBay will make it mandatory to add the VAT rate on all UK and EU sites when listing items.

Changes to EU VAT for cross-border e-commerce

From 1 July 2021, the EU will introduce significant changes to how VAT is collected on imports into the EU, supplies within the EU by non-EU sellers and cross border supplies by EU sellers. 

 

The changes at a glance:

  • The current VAT exemption for imports of goods in small consignment of a value of up to €22 into the EU will be abolished.
  •  eBay will collect and remit VAT for imports of consignments up to a value of €150 shipped into the EU and sold to consumers.
  • For goods where the seller is a non-EU business but the goods are already within the EU, eBay will collect and remit VAT on sales to consumers within EU countries, and from one EU country to another.
  • The current distance selling thresholds for intra-EU cross-border supplies will be abolished.
  • All sellers will have to provide a gross price and separate VAT rate on their listings, so that eBay can determine the correct amount of VAT to collect from consumers.
  •  EU sellers with an annual turnover of more than €10,000 for their complete intra-EU cross-border supplies will have to charge the VAT of the EU country of delivery.
  • As eBay is preparing for these changes, cross-border trade sellers should also assess the impact on their business and prepare for the changes. Please contact your tax adviser for questions on your VAT obligations.