VAT regulations unmanageable for online merchants: three recommendations by Ecommerce Europe


Ecommerce Europe shares the Dutch Labour Party’s criticism regarding unworkable VAT regulations. Dutch online merchants could increase their profits if European VAT rules were further simplified. Creating a one-stop-shop for VAT issues could help in this regard.

Criticism on VAT systems for electronic products 

Member of the European Parliament (MEP) Paul Tang and Dutch Member of Parliament (MP) Ed Groot (both from the Dutch Labour Party, PvdA) believe that the new VAT regulations are completely unmanageable for online merchants. They criticise the new VAT rules for the online selling of electronic products. Ecommerce Europe stresses that problems relating to VAT stretch out beyond the realm of electronic products.

Less administrative burdens, please!

MEP Tang and MP Groot “want to find a solution in consultation with the industry”. Ecommerce Europe has three recommendations to reduce administrative burdens for online merchants and simplify European sales to consumers:

  1. More harmonization with regard to European VAT regulations. Variations of VAT rates across the European Union create a serious disturbance of the level playing field that is needed to foster cross-border trade. For example, VAT rates can go from 15% in Luxembourg to 25% in Denmark.
  2. Small and medium enterprises should profit from an exemption of VAT obligations on exports up to €100,000 per destination country. With the implementation of this threshold, online merchants would not have to invest disproportionate resources in verifying the home base of the consumer and calculating and displaying individual prices, which would be burdensome for them.
  3. There should be a (pan-European) one-stop-shop, an information point on all VAT related issues for online merchants. Especially smaller shops often lack of fiscal and VAT knowledge, and offering them useful information or breaking down some of these burdens would be beneficial for the sector.