eCommerce: What measures will be introduced in Europe in 2020 and 2021?

The surprising development of eCommerce has overtaken many governments around the world. The laws in force were not adapted to the new realities, and many legal loopholes were created to the detriment of online merchants, consumers, and also tax administrations. To remedy this, the countries of the European Union have studied several reforms intended to improve the traceability of transactions made and better tax collection. Some of these reforms will come into effect in 2020 and others in 2021 in a few EU countries. In this article, we will present some of them, including the European platform to business regulation and the European Parliament regulation 2018/1046, which will come into force in 2021. 

The European Platform to Business (“P2B”) regulation promoting fairness and transparency for companies using online intermediation services was published on July 11, 2019. It comes into force on July 12, 2020, and will constitute common law unified for all member states. The main objective of this regulation is to rebalance the power relationship between the platforms and professional sellers who use them. 

But the measure that will most certainly interest companies is that concerning VAT and the application of Regulation 2018/1046 of the European Parliament. In France, this application will come into force in 2021. Until now, in terms of VAT, there have been relatively restrictive thresholds. This threshold should not exceed 35,000 Euro or 100,000 Euro in the country of arrival, depending on the member state. In 2021, there will be a single threshold, up to 10,000 Euro. Below, the VAT of the country from which the goods are delivered will apply. Beyond this threshold, the creation of the one-stop-shop will make it possible to collect the VAT due in the different Member States. 

This law will also include the creation of a register to be kept available to the administration for logistics warehouses storing goods from third countries to the EU and sold through eCommerce platforms. Finally, there will be an obligation for platforms to indicate to the administration separately the amounts of transactions subject to VAT in France. 

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