Union scheme: VAT rules for e-commerce
Do you have a webshop in the Netherlands? The great thing about e-commerce is that you are not tied to national borders and, therefore, have a larger reach. Do you supply goods to consumers in other countries within the EU? Then you will have to deal with European VAT rules. These rules have changed since 1 July 2021. From now on, there is only one VAT threshold of € 10,000. There used to be a threshold per EU country, which could differ per EU country. In this article, you can read all about VAT rules for e-commerce entrepreneurs in the Netherlands.
Union scheme & One Shop Stop (OSS)
Up to a turnover of € 10,000 in another EU country, you may use the Dutch VAT rates. You have to pay the VAT rate of that specific country on the amount that exceeds the threshold. There are two options for submitting the VAT return:
- The old-fashioned way: you submit a local VAT return to the country where you deliver. You register with the local tax authorities in the EU countries. Until July 1, 2021, this was the only way.
- Union scheme (Unieregeling): if you register your company for the Union scheme, you can pay the foreign VAT in the Netherlands. In this case, you pay the foreign VAT via the One Shop Stop (OSS) (in Dutch: éénloketsystem). Each quarter, in the OSS portal, you indicate how much VAT you have to pay to each EU country. You transfer this amount to the Dutch tax authorities, and they will make sure it gets to the right country. No more VAT registration in other countries, so less administration!
For who is the Union Scheme?
Do you want to register for the Union scheme? This is possible when you supply products within the EU to private individuals and entrepreneurs who are not subject to VAT. The Union scheme is perfect for entrepreneurs in the Netherlands without local registrations in other EU countries. The Union scheme is not mandatory, but you have to choose between the two options. So do you opt for the Union scheme? Then you are obliged to do this for all deliveries in other EU countries.
For example, you have been supplying products from the Netherlands to France for a long time, which is why you are registered here for VAT. Now, you want to expand your webshop to Belgium, and you want to use the Union scheme (One Stop Shop) for these deliveries. From that moment on, you are no longer allowed to file a local VAT return in France.
Dropshipping and VAT
Dropshipping means that a customer orders something in your webshop. Next, you place the order with another supplier and he sends the product to the customer. So, you do not keep the stock yourself. The VAT changes mentioned above also apply to dropshippers that sell products to consumers in the EU.
Do you purchase the products from a supplier outside the EU (for example China), and will this be delivered to a consumer within the EU? Before 1 July 2021, there was an import exemption for parcels up to € 22, but this has expired. The VAT can be paid in two ways:
- By the consumer. The courier company pays the VAT and then reclaims it from the consumer.
- By the supplier. Since 1st of July, 2021, the supplier can use the I-OSS (Input One Stop Shop), whereby the supplier submits the VAT return in one EU country. Instead of import tax, the supplier pays the VAT directly via the I-OSS that applies in the country of delivery.
We are happy to help!
Are you an (e-commerce) entrepreneur in the Netherlands, and could you use some help with the VAT return? Or do you have questions about the Union scheme? We are happy to help you! Contact us using the details below.