Home » World » Simplified VAT application rules are planned in e-commerce / Article / LSM.lv

Simplified VAT application rules are planned in e-commerce / Article / LSM.lv

From January 1, 2021, it is planned to apply simplified value added tax (VAT) regulations in the field of e-commerce, the amendments to the Value Added Tax Law supported by the government on Tuesday envisage.

The Ministry of Finance was informed that the purpose of the amendments is to establish rules for simplifying the application of VAT in the field of e-commerce, ensuring a fair competitive environment at the European Union (EU) level for all entrepreneurs regardless of their country of registration.

“Digital platforms enable companies, especially small ones, to effectively acquire new customers in the global market. Recent studies show that 57% of cross-border deliveries are made through the three largest digital platforms, and many other platforms operate locally and in geographical clusters,” he said. ministry.

In order to protect Member States’ revenues and create a level playing field for e-commerce at EU level, a regulation on VAT on e-commerce transactions was created in 2017, with certain rules coming into force on 1 January 2019, but basic rules should enter into force January 1, 2021.

From 2021, the scope of the special VAT regime will be extended, making it possible to register in one Member State and pay VAT on any transactions carried out in the e-environment under the special VAT regime.

In addition, the VAT exemption for low value consignments of € 22 will be abolished in 2021, which currently puts businesses operating in the EU at a disadvantage compared to businesses in third countries and territories. This will ensure a level playing field for all operators, regardless of their country of establishment. Subsequently, VAT will be charged on consignments received from third countries and territories, regardless of the value of the consignment.

The Saeima will still decide on the draft law.

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