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The EU simplifies cross-border VAT filing

Last Tuesday, Danish companies received new EU rules for cross-border VAT. Garden furniture manufacturer Cane-Line is particularly happy about the new one-stop shop, which saves the company from having to file VAT returns in each individual EU country that it sells to.
Danish garden furniture manufacturer Cane-line no longer needs to register for VAT individually in each country that it sells its tables and chairs to.

Publiceret: 13.12.2017
Af Karen Witt Olsen mail

Last Tuesday was a very good day for Danish companies with e-commerce in Europe.

The EU’s economic and finance ministers passed a proposal from the EU Commission that allows companies selling to consumers in other EU countries to file their VAT returns for online sales in just a single place.

This is good news for Cane-line, which sells its garden furniture all over the world.

“The new one-stop shop option that allows us to file VAT returns to all EU member states in one place - and this place being in Denmark - will be a huge administrative relief for us,” says Cane-line CFO Anette Muus.

See also: Outsourcing halved

What’s French for VAT?

Cane-line sells furniture to consumers. Because the company has sales above a certain amount to Germany, France, Sweden, England and Austria, it is VAT-registered in those countries.

As it stands, the CFO and her employees must log in to each individual country’s tax authority to file VAT when it sells garden furniture to a family in another EU country.

This is a huge administrative burden, explains CFO Anette Muus

“The systems vary greatly from country to country. Some file per month, others per quarter. The rates are different, as are log-in procedures and access keys. The countries regularly change procedures, get new websites and carry out updates. And the task of learning VAT terminology in each language is a challenge in itself,” she says.

Companies selling to other companies are VAT exempt within the EU when they have a VAT number. The challenges arise when a company sells to a consumer.

42 per cent of European consumers shop via digital channels. Annette Falberg, Director

Online sales are growing

Another reason why the new EU rules are such good news is that they reflect the direction that sales are headed in, explains Cane-line’s CFO.

Director of the Danish Commercial Industries Federation Annette Falberg is also pleased.

She points out that the new rules will remove one of the major barriers to exporting via e-commerce and thereby make it easier for more companies to get started.

“42 per cent of European consumers shop via digital channels. If Danish companies are not present digitally, we will simply lose out on sales in the future,” she says.

A more level playing field

The concept of dealing with VAT obligations in a one-stop shop is not new.

Since 2015, sellers of electronic services such as software and e-books have been able to file VAT returns to all EU countries in that way.

The extension of the portal also means that Danish companies will have fairer competitive conditions, says Director Annette Falberg.

“The new rules will create a more level playing field when selling goods to consumers in the EU. From now on, consumers will face the same VAT rate, regardless of whether they are shopping in a physical shop or online. We’re happy about that,” says Annette Falberg.

The parts of the new legislation related to the one-stop shop are expected to come into effect in 2021.

42 per cent of European consumers shop via digital channels.     

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PUBLISHED: 12/13/2017 LAST MODIFIED: 12/13/2017