Online marketplaces now subject to V.A.T.
Initially scheduled for January 1st, 2021, the implementation of the European directive from 2017, related to V.A.T. on e-commerce transactions, will be effective on July 1st. Marketplaces operating in the European Union, such as Amazon, Zalando or Manomano, will be responsible for collecting and settling V.A.T. on behalf of their third-party sellers.
From a single Euro of turnover received on their marketplaces, they will have to collect the associated V.A.T., which will significantly increase prices. In 2019, for example, 98% of sellers registered on French marketplaces were not registered for V.A.T. in 2019, according to the General Inspectorate of Finance. Secondly, small parcels worth less than €22 sent from outside the E.U. like China (home market of Aliexpress, Shein and Wish) will no longer be exempt from V.A.T. Last but not least, the E.U. will create a single digital portal to simplify Customs procedures. Companies will have to file all the information required for the cross-border movement of goods within the E.U.