Ask a tax advisor on the topic of Sales tax / Turnover tax

Assessment of the relevant delivery threshold EU 10,000 euros from 01.07.2021.

June 11, 2021 | 25,00 EUR | answered by Steuerberater Knut Christiansen

Hello,

as of 01.07.21, the value-added tax in the EU will be reformed. Online retailers must display and remit the respective tax of the destination country for total sales exceeding > 10,000 € net in the EU.

According to § 3c paragraph 3 UStG: The tax of the destination country is not applicable if the total amount of consideration attributable to deliveries to a member state does not exceed the relevant delivery threshold in the current calendar year and has not exceeded it in the previous calendar year.

I have a question regarding the assessment of whether the new regulation applies to us or not.
Our sales exceeded 10,000 € net in 2020.
Our sales in 2021 are not expected to exceed 10,000 € net (currently around 3000 €).
So, the relevant delivery threshold was exceeded in the previous calendar year, but is not expected to be exceeded in the current calendar year.

Do we have to show the tax of the destination country on the invoices (with registration in the One-Stop-Shop) from 01.07.21 or not?
If not: What should we do if sales unexpectedly exceed 10,000 € net in 2021?

Thank you for your response.

Steuerberater Knut Christiansen

Hello and thank you for using ask-a-professional.com!

Regarding your inquiry, I would like to provide the following information.

The condition for taxation in the destination country is that the turnover threshold is exceeded in the previous year AND in the current year. So if you do not exceed the value of 10,000 EUR in 2021, you would have to pay VAT in Germany unless you voluntarily opt for the OSS procedure.

If, contrary to expectations, the turnover is exceeded during the year 2021, then for the first time the turnover that leads to the exceeding would be taxed in the destination country. In that case, it would make sense to register for the OSS procedure to avoid registering in an EU country.

I hope this answers your question, if not, please feel free to reach out again.

Best regards,
Knut Christiansen
Tax advisor