The European Union is making sweeping updates to how retailers need to calculate Value-Added Tax (VAT) when selling goods into its member countries, taking effect on July 1. This broadly extends a 2015 VAT change for cross-border sales to include low-cost ecommerce goods under 22 Euros, and impacts carriers and logistics providers as well as sellers and their customers. While the deadline was pushed out from Jan. 1 of this year due to COVID-19, many sellers probably wish it was pushed out further. Most have not yet registered with the EU, and many are opting out of the market due to complexity and costs.
What are the implications of this major change in cross-border taxation, for sellers from the U.S. as well as within the EU? Peter Boerhof, VAT director for the chief tax office in Europe for Vertex, helps us better understand the implications and how sellers need to react.
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