What changes are there in the EU value added tax as of 2021?
September 7, 2022 | 40,00 EUR | answered by Friedhelm Sauer
Dear tax advisor,
I am reaching out to you as a business owner who is facing issues with Value Added Tax (VAT) and unsure about the changes that will be coming in 2021. So far, I have been conducting my business within the EU and complying with the applicable VAT regulations. However, I have heard that there will be some changes next year that could impact EU VAT.
I am concerned about how these changes will affect my business activities and whether I may need to put in additional bureaucratic effort to comply with the new regulations. It is important to me to be informed in advance about the upcoming changes to prepare my company accordingly and minimize potential risks.
Therefore, my question to you is: What specific changes are there in EU VAT from 2021 onwards and how can I, as a business owner, prepare for them? Are there any specific measures I should take to comply with the new legal requirements? I would greatly appreciate your expert advice and support on this matter.
Thank you in advance for your help.
Best regards,
Otto Kock
Dear Mr. Kock,
Thank you for your inquiry regarding the changes in the EU Value Added Tax from 2021. It is understandable that as a business owner, you are concerned and would like to be informed about the upcoming changes in order to prepare your company accordingly. I am happy to assist you and would like to explain the most important changes and possible measures to you.
As of July 1, 2021, the so-called "VAT Digital Directive" of the EU will come into effect. This directive aims to simplify and harmonize cross-border trade within the EU. One of the most important changes concerns the so-called "One-Stop-Shop" (OSS) regulation. With the OSS, businesses can submit their VAT declarations for cross-border services and goods deliveries in one EU member state, rather than in each individual member state.
To prepare for the OSS, you should ensure that your company is eligible to participate in this procedure. This includes registering for the OSS in the EU member state of your choice, as well as capturing and processing the relevant sales data in your accounting system. It is important to inform yourself early on about the exact requirements and, if necessary, start implementing them in a timely manner.
Furthermore, you should assess whether your current business processes and contracts comply with the new legal requirements and adjust them if necessary. Training your employees on the OSS and the new regulations may also be beneficial to ensure that all parties are informed about the changes and implement them correctly.
In summary, the changes in the EU Value Added Tax from 2021 mainly concern the introduction of the OSS, which allows businesses to submit their VAT declarations for cross-border transactions in one EU member state. To prepare for this change, you should inform yourself early about the requirements, potentially make your company ready for it, and adjust your business processes accordingly.
I hope that I could help you with this information and am available for further questions. Thank you for your trust and good luck with implementing the new legal requirements.
Best regards,
Friedhelm Sauer, Tax Advisor
