For UK businesses, HMRC advises you to write in individually to explain your business model and clarify your business’s status.For businesses outside the UK, we would urge you to seek clarification from your own tax office and / or government.At the moment, people selling goods across national boundaries have a distance-selling threshold of either €35,000 or €100,000 (depending on the country they sell into) before having to register for VAT in that country. If a third-party platform handles the payment and supply and also sets the standard Terms and Conditions, they are responsible for VAT.
The European Commission argues that this will create a level playing field, because it means that sellers can’t undercut their competitors unfairly by using a lower VAT rate.
However, because there’s no threshold, it actually disadvantages the smallest companies and individual traders.
Please let us know any official replies you’re able to share.
For UK businesses, HMRC has told Syed Kamall MEP that they can block sales to the rest of the EU if they can show it would impose a disproportionately high administrative burden on the business.
At present, many of them will not even supply you with the relevant data you require to comply.
The EU VAT Action Campaign Facebook group has a growing list of compliant and non-compliant platforms which you can use as a guide.
If the product is different for each customer (eg bespoke logos, customised templates, PDF documents written especially for them), then that counts as more than minimal intervention, and the rules don’t apply to your work.
The EU guidelines specify “services which are delivered over the Internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention, and impossible to ensure in the absence of information technology” (Article 7, paragraph 1; page 85). The EU guidelines specify “minimal or no human intevention” and it’s debatable whether manual emailing is minimal intervention.
However, EU anti-discrimination law may not fall under HMRC’s authority.
For EU businesses, refusing to sell to other EU customers may be a breach of EU anti-discrimination law: “Because of a protected characteristic, you and anyone working for you must not refuse to serve someone or refuse to take them on as a client” (page 12).
It creates a divide between the multinational companies who have the systems to comply and those sole traders and microbusinesses that simply can’t.