Small online companies and micro-enterprises should be protected against administrative disruption and uncertainty.
The legislation regarding the proposed postponement of the VAT e-commerce system will make it easier for consumers and businesses to buy and sell goods cross-border online.
It will also help EU Member States to collect VAT due, by making sure that non-EU businesses do not get preferential treatment when selling to EU consumers. However, any discontinuities should be avoided for small operators.
Macro-data may be masking what has been really happening for SMEs and micro-enterprises on the ground. What is true for big online platforms might not be true for smaller online businesses. At a time of disruption like the present, one has to watch out not to create even more sources of change and uncertainty, including those of an administrative nature.
In the context of the Covid-19 pandemic crisis, a number of quick fixes are being adopted to ensure that directives and regulations reflect and adapt to the current economic situation. Among these quick fixes is the postponement of the implementation date of a new VAT system for online sellers.
The new rules will introduce new building blocks for the system that will be needed for online companies to take full advantage of the EU’s Single Market.
The updated electronic business portal for VAT put in place by these measures will also allow companies that sell goods online to their customers to deal with their VAT obligations in the EU through one easy-to-use online portal in their own language.
The European Commission had proposed postponing the application of the VAT e-commerce package by six months, with effect from 1 July 2021 instead of 1 January 2021. MEPS have now agreed a compromise to reduce the postponement to three months with effect from April 2021.
Alfred Sant’s intervention during a European Parliament Economic and Monetary Affairs Committee meeting