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Monday, 06 April 2020

I want to switch to internet sales, what are the main traps with respect to VAT?

Stijn Vastmans

Stijn Vastmans

Partner
Ghent
Stein De Maeijer

Stein De Maeijer

Counsel
Brussels

:: UPDATE - 01/09/2020 ::

A company that wants to set up a website where customers can buy goods and whereby the company facilitates the transport to the private customers will have to take into account that there may be important consequences for the VAT treatment of these sales. Such sales can qualify as distance sales for which a special VAT-regulation is applicable. Moreover, these rules will amend substantially as from 1 July 2021.

In summary, there has to be paid a very close attention to sales of goods through webshops to private individuals that are established abroad. It is possible that your company will be obliged to pay VAT in other countries as a result of these distance sales for which it will also have to VAT-register in these countries. If your webshop-company does not comply with the VAT-rules for distance sales, fines and late payment interests – apart from the VAT claim itself - can be imposed in these countries.

The new rules for distance sales, which will enter into force as from 1 July 2021, will, on the one hand, ensure that foreign VAT will become due a lot quicker, but at the same time provide for an administrative simplification to pay this foreign VAT. In particular, a VAT-taxable person will no longer be obliged to pay the foreign VAT by means of a VAT registration in this country, but will be able to do so by means of a special VAT return which can be submitted via INTERVAT (in Belgium). Note that there are also new rules for distance sales which are made via an online platform such as an online marketplace.

If you have any questions on this subject, please contact the authors of this article.

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