Your e-commerce business in Italy and VAT: what changes from 1st of July?
Starting from the 1st of July, new rules will apply concerning distance selling between the EU Member States. New rules will establish new measures and obligations to prevent fraud and to preserve competition among companies operating within and outside the EU.
EU distance commerce will be impacted by EU Directive 2014/2017 in the following ways:
– The introduction of the article “Supply of goods facilitated by IT interfaces”
– New rules around the EU distance selling
The new Italian VAT regime applies to distance commerce identified by the new Directive. In this sense, distance commerce is the sales of goods delivered or transported by the supplier or on his behalf. Also, the delivery or transport shall take place from two different member States. It is important to notice that distance selling is not just identified within the e-commerce definition. In fact, the main aspect to take into consideration is the supplier’s involvement in the delivery of the goods to the buyer’s agreed destination.
Quantitative thresholds on distance selling have been abolished. Therefore, sellers involved in a cross-border transaction are going to apply the VAT rate of the country of destination, except for micro-enterprises. Micro-enterprises will have a unique threshold within the whole EU. By doing so, companies involved in cross-border commerce with an amount not exceeding EUR10.000.00 can apply the VAT rate of their country of origin, irrespectively of the VAT rate of the country of destination.
With the new VAT regime, distance commerce within the EU borders will be framed according to the taxation regime of the country of destination. For instance, an Italian company involved in distance commerce who received an order from France, the VAT rate to be applied is the French one.
The VAT payment will be regulated by the ONE SHOP STOP regime. By doing so, the business entity will pay the VAT rate in a centralized and digital way.