IOEKTA | Creative Unity

New EU VAT rules threaten disrupting online sales

E-commerce companies are bracing for the imminent disruption of online sales ahead of the new EU VAT rules that are due to come into force on January 1, 2015.

Under the rules that were designed to put a stop to a loophole channeling billions of euros to low-VAT-rate states the VAT will soon be charged in the country of the consumer.

The rules will apply to telecommunication, broadcasting, and e-service companies, including games producers and app makers, and the smaller market players are frightened by the complications involving VAT administration, invoicing requirements, quarterly returns, etc. Finding out where a consumer is based also requires a substantial effort and might affect the payment process and disrupt sales.

Serious concerns have been voiced about how would the new rules affect independent e-publishing. There’s no much of a doubt that complying with the rules would be affordable and manageable only by big market players despite the novel scheme of one-stop-shop for VAT registration introduced in EU.