On 30 September 2020, the European Commission published Explanatory Notes on the new VAT e-commerce rules that apply from 1 July 2021, which change how VAT applies to imports and distance sales of goods in the EU. These extensive Explanatory Notes explain and clarify the upcoming VAT rules and provide practical guidance for electronic interfaces (e.g. marketplaces or platforms), suppliers and logistic service providers involved in e-commerce. 

Due to COVID-19, the implementation of the VAT e-commerce rules was postponed by six months from 1 January 2021 to 1 July 2021; however, the European Commission recently indicated that further postponement will not occur. Businesses must now urgently prepare for the new rules. The Explanatory Notes offer some useful guidance for this exercise. Although they are not legally binding, it is our experience that all EU member states adhere to the views set out in such notes. After all, representatives of all EU member states were involved in drafting them.  

Baker McKenzie’s EMEA Tax Practice Group presented an overview on VAT on 13 October 2020, the tenth in a series of short webinars to keep tax professionals abreast of recent developments in these less than certain times.

Baker McKenzie’s VAT/Indirect Tax Practice presented “Financial Services VAT,” on 7 October 2020. This was the fifth presentation in the International VAT Conference Webinar Series, a global webinar series designed for VAT specialists from all industry sectors that aims to discuss the latest developing trends and hot topics in the VAT/goods and services tax (GST) and customs arena.