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What marketplace sellers need to know about EU VAT reform

By Chris Dawson June 7, 2021 - 10:00 am

EU VAT regulations for sales on marketplaces are changing on July 1st, and those changes will have significant impact for sellers based outside the EU, both in terms of customs procedures and fulfilment requirements. In this webinar, representatives from KPMG and Fruugo explained the key changes that are being implemented and discuss what actions marketplace sellers need to take to get ready.

There was an avalanche of questions about this topic so it’s clearly something people are wondering about – you’ll want to watch this webinar to watch the Q&A as your own questions were probably address. The questions about the Import One-Stop Shop (IOSS) – which is actually intended to simplify the VAT process – were relentless, showing that there is much to be done between now and the 1st of July to ensure a smooth switch over.

You’ll also discover how global marketplace Fruugo coupled with KPMG’s tax experts are together, uniquely positioned to help you navigate the new rules.

“The highlight that all businesses operating in ecommerce should know is that, from 1st July, there are major changes taking place across the whole of the EU on how to deal with VAT on ecommerce transactions, fundamentally changing how you account for VAT and who accounts for it.”
– Paul Casey, Director VAT, KPMG

“We had an avalanche of questions about the topic – so it’s clearly something people are wondering about.
 
Non-EU retailers or import consignments need to include the IOSS number in each consignment. If it’s not available on each consignment, the consumer will have to pay VAT again, which will make for bad customer experience and lead to overpaying tax – which no one wants. It’s really important that as a seller, you get that number on the package. What we’ve done to help facilitate that is from 1st July, we will include that number with the order details that we provide through our API or through our retailer portal.
 
The challenge is going to be getting the number onto the appropriate label – the last step. We’ve had this experience before – as this is the same reform the UK implemented in January, and Norway, Australia and New Zealand have put in place previously. A lot of sellers are still looking for solutions to figure out what happens if you have orders for multiple marketplaces in the EU, and whether you can assign the VAT number on an order by order basis. We’ve been doing some investigation into a couple of the carriers – for example, DHL and DPD allow sellers to do that, if you’re using their interface to print labels. Whereas Royal Mail can’t, and don’t seem to have plans on providing that.”

– Håkan Thyr, Chief Revenue Office, Fruugo

“Step one is to look at the geography and map out all the fulfilment routes. Look at the flows – the froms and the to’s. It’s one of the most useful things you can do. The geography is coming alive – and we’re seeing it with marketplaces. The parcel providers are on a journey as well – with labelling and carrier software – and will be for the next few weeks and months. Just make sure you understand the whole flow as it means you make the right decisions on that side.”
– Iain Prince, Associate Partner, Supply Chain Consulting, KPMG

“The changes have been brought about effectively for the authorities to have better control of cross border internet sales. None of this is easy. We’ve got very few days and weeks to work out what needs to be done. But the message is clear – it’s about mapping the supply chains, understanding your intrinsic sales value – whether it’s above or below the 150 euro limit.”
– Lorenzo Rossetti, Director, Customs & International Trade, KPMG

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Fruugo

Fruugo is a global marketplace with dedicated websites for 46 countries including the UK, most of Europe, parts of Asia and also Australia and New Zealand.

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