The changes made will effect everyone in the e-commerce supply chain, including businesses who;
- Sell or supply goods from Northern Ireland to non-VAT registered customers in the EU
- Make supplies of goods from the EU to non-VAT registered customers in Northern Ireland
- Send low value goods to Northern Ireland/EU from outside the EU and Northern Ireland
- Have goods located in Northern Ireland at the point of sale (applies to non-EU businesses)
The changes will also affect online marketplaces that facilitate the sale of goods located in NI/EU by non-EU businesses to non-VAT registered customers in the EU and NI consumers, as well as online marketplaces that facilitate the sale of goods from Great Britain to consumers in NI and the EU.
Starting July 1st, the exemption for goods imported with a value of up to £19 (€22) will no longer apply, and instead will be charged VAT regardless of value. For businesses importing goods with a value of £135 (€150) or less, they will be able to use the EU’s new IOSS (Import One-Stop Shop), which enables them to charge VAT at the point of sale (excluding goods that are subjected to excise duty).
The distance selling VAT threshold regime has also changed. Before these changes, EU businesses had to register VAT in each EU country that they sold goods in, and they’d also charge their customers their domestic VAT rate once sales hit a certain threshold. The new changes remove this threshold and enforce that the VAT rate must be charged at the first sale. However, businesses can file all sales through a single sale One-Stop Shop (OSS) VAT return if they choose to close their VAT registration in different EU countries.