In a letter State Secretary Vijlbrief of Finance has informed the House that the Netherlands will, after all, introduce the new VAT rules on e-commerce with effect from 1 July 2021. This is particularly relevant for online shops (and other businesses) that supply goods to private individuals in other EU Member States.
Distance sales
We are focusing in particular on the rules governing distance selling. In our paper VAT on the supply of goods to consumers abroad We explain the rules here. Businesses engaged in distance selling would be well advised to assess – or have assessed – over the coming months what impact the new rules will have on their VAT payments. Much more often than has been the case to date, VAT must be paid in the EU Member State where the private customer resides.
Impossible
During the debate on the bill to implement these rules into the Dutch VAT system, it was stated that they could not be introduced until 1 January 2022 at the earliest. Only then would the Tax and Customs Administration’s IT systems be ready to handle them.
The EU has stated that the start date of 1 July 2021 will not be changed. The start of the scheme has therefore already been postponed. Originally, the scheme was due to come into force on 1 January 2021.
Emergency track
That is still the case, but a fast-track procedure is being introduced. This means that registrations can be processed automatically. However, the Tax and Customs Administration will have to process these manually. This will take longer, the risk of errors is greater, and there will be a greater need for interaction with the business owner.