In an increasingly digitalized world thanks to the internet, orders on a digital platform such as an e-commerce can arrive from any part of the European Community and the world, thus generating the need to establish a series of rules regarding the taxes that must be paid for VAT purposes.

The problem does not arise in the context of B2B relations, a term that identifies business to business transactions, that is, between two companies that have VAT. In this case, the taxation regime for the import and sale of products applies. The situation regarding the other type of sale, the one that is commonly identified with the acronym B2C , is quite different.

The acronym identifies the Business to Consumer, therefore the sale to the private individual , today one of the most widespread forms thanks to the security of payments and the wide diffusion of sites for the sale of products. In this particular case, what are the rules that establish the amounts of VAT taxation?

A question that you must understand if you have an e-commerce, or if you are about to open it, given that you can find yourself with hundreds of orders that come from different countries in which there is a VAT tax regime different from 'Italy. Today, the EU directive 2017/2455 , extended to 1 July 2021 , must be considered as a regulatory reference. In this guide we will analyze what are the innovations introduced for the VAT system in e-commerce, what the MOSS system is, and the changes to art 14 bis of the consolidated text 2006/112 / EC .

An e-commerce that adheres to the MOSS will be able to obtain a derogation from the principle of territoriality provided for by the European regulation in Article 33, carrying out all the VAT procedures with reference to the residence of the e-commerce.

The novelties of the EU directive 2017/2455

The application of VAT taxation in the distance selling of an e-commerce towards private individuals is regulated by the EU directive 2017/2455 of 5 December 2017, which should have entered into force on 1 January 2021. Due to the particular economic situation and health emergency, its application has been extended to 1 July 2021.

In order to understand what the innovations have been introduced, it will be important to clarify some aspects concerning the subjects who are directly concerned.

  • E-commerce: is the company that provides a service, and which will be defined with the terms of supplier or service provider. The nature of a digital platform can be of various kinds, for example linked to telecommunications, broadcasting, the supply of digital tools or the sale of diversified products and services.
  • Private: the other interested party is the customer, that is the person who places an order using the tool of distance selling as an e-commerce and who is not a VAT number holder.

The first innovation introduced by regulation 2017/2455 concerns the concept of territoriality established by directive 2006/112 / EC, which can be defined as a sort of general single text applied within the Community in order to regulate VAT taxation.

The consolidated act entered into force on 1 January 2007, and in the case of distance selling to private individuals, it provided for the basic principle of applying taxation with reference to the country of the service provider. This means that VAT was applied with reference to the place where an e-commerce was registered, and therefore, given its virtual reality, it was considered the registration of the VAT number, or the residence of the company.

This type of system appeared quite simple in managing payments in private retailing, but with the consequence of creating a certain imbalance from the market point of view, thus benefiting those sites that were located in countries where there is a system of 'More favorable VAT and therefore more advantageous taxation on products.

The new European regulation always maintains the idea of territoriality, but with reference to the country of the private individual making the purchase and not the one in which the e-commerce is present. In particular, article 33 of regulation 2017/2455, underlines which are the parameters to be evaluated, specifying that the taxation of the VAT tax must refer to the place where the object was delivered and not the one from which the shipping.

So, for example, if you own an e-commerce registered in Italy and you make a purchase in Spain, the value added tax, or the VAT applied, will be that of the latter nation.

However, the aspect connected to territoriality entails a series of problems for e-commerce. In fact, in the case of orders from different countries, one would have to pay the VAT tax in all the individual countries in which the orders will be delivered: a reality that implies a certain logistical difficulty and also costs of a certain importance. .

In this perspective, other innovations will also be introduced from 1 July 2021:

  • the single sales threshold: a new parameter of € 10,000 will be introduced on the basis of which an exception to the territoriality rule will be applied. This means that if the operations of an e-commerce fall within this value, the taxation of VAT will be applied with reference to the State in which the VAT number of the e-commerce is registered. On the other hand, if this threshold is exceeded, the principle of territoriality will be applied with reference to the client.
  • The extension of the MOSS: it will be possible to extend the VAT regime of the MOSS for all activities concerning electronic services, telecommunications, television broadcasting, but also all the services connected to the sale of objects and services if referring to the private sector .
  • The changes to directive 2006/112 / EC: a series of changes have been set aside with reference to article 14 bis of directive 2006/112 / EC.

How to calculate the € 10,000 threshold

The consolidated act 2006/112 / EC established the concept of a maximum threshold, that is a value within which the taxation of the country of the supplier or service provider was applied. This meant that in the event that the e-commerce activities fell within this limit, the territoriality rule was applied with reference to the place where the digital platform was registered. In the case of Italy, the established sum was equal to € 35,000.

Regulation 2017/2455 leaves the concept of maximum threshold, but modifies the parameter by lowering it, with a value of € 10,000 . So from 1 July these two aspects will have to be considered in order to assess taxation:

  • Compliance with the threshold: if your activities fall within the € 10,000 threshold, the VAT of the supplier's country will apply.
  • Exceeding the threshold: if the threshold is exceeded, reference will be made to taxation based on the country of the recipient as established by Article 33 paragraph A of Regulation 2006/112 / EC.

But how is the € 10,000 threshold calculated? Chapter 3 bis of the new directive 2017/2455 establishes which are the cases of derogation from Article 33, specifying the indications for calculating the threshold. The following parameters must be considered:

  • Transaction value: the amount of € 10,000 is considered net of VAT.
  • Timing: the calculation will be made on the basis of the current calendar year, therefore from January 1st to December 31st.
  • Type of services: this refers to distance selling to individuals who have a permanent residence in a Member State other than that of the supplier. In the calculation for the threshold, the possible shipment of products to a member country other than that of the e-commerce is also considered.

What is MOSS and what are the benefits

Among the innovations that will be introduced from 1 July 2021, there is the extension of the MOSS regime to those activities of an e-commerce that are outside the technological sphere. The MOSS is an acronym that identifies the Mini One Stop Shop, at the same time a portal connected to the Revenue Agency website, but also an advantageous VAT registration system.

In fact, an e-commerce that adheres to the MOSS will be able to obtain a derogation from the principle of territoriality provided for by the European regulation in Article 33, carrying out all the VAT procedures with reference to the residence of the e-commerce. However, this type of subsidized VAT regime applies only to the distance selling activities towards the private individual and therefore to the B2C system. The MOSS therefore from 1 July 2021 can be requested if the following conditions are met:

  • e-commerce located in a Member Country;
  • telecommunications, electronic services, other sales services, including non-digital ones;
  • distance selling between e-commerce and individuals.

The MOSS is an optional regime, this means that it will be necessary to make the appropriate request on the website of the Revenue Agency at the MOSS portal of the same name. Once the request has been made, the MOSS VAT regime will apply in all member states.

Among the main advantages obtained by joining this system is a simpler VAT management, since it will only apply the regime of reference to the State of residence, which is very advantageous if you have numerous private customers from different countries. The declarations will be made directly through the specific portal of the Revenue Agency with deadlines by the 20th of the month following the reference quarter, thus offering more precise VAT management.

The novelties of article 14 bis of directive 2006/112 / EC

Finally, the entry into force of regulation 2017/2455 will also bring changes with reference to Article 14 bis which regulates the use of an electronic interface for the remote sale of goods imported from third countries, with shipments that are less than amount of € 150.

According to the new regulation, the digital platform, as a taxable person, is considered to have carried out two operations:

  • receipt of goods: refers to the purchase and receipt action by a third party supplier;
  • cession: it is the subsequent action of selling or transferring the asset to a private individual.

Thanks to this distinction, a different taxation will apply. In fact, for what concerns the distance selling from a supplier present in a third country to an e-commerce, no VAT will be applied. On the other hand, for the sales activity by the digital platform towards private individuals, the VAT taxation will be applied with reference to the country of the customer.

Conclusions: the changes from 1 July 2021

Thanks to the new derogation with reference to regulation 2017/2455, it has been possible to introduce a series of innovations that make it possible to simplify distance selling activities between an e-commerce and a private individual. In particular, the minimum threshold for territoriality also benefits small digital platforms, while for those that carry out diversified activities with a large number of customers, a simplification of the value added tax will be obtained. Finally, thanks to the extension of the MOSS regime, the application of VAT taxation becomes more transparent and easier to manage independently.

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Author: Stefania Tamberlani


Stefania Tamberlani commercial, organizational and administrative hub of Arte e Informatica deals with relationships with customers and suppliers. He has a high level of knowledge in the configuration and management of the Joomla and PrestaShop platforms, from the configuration of payment methods to couriers, passing through the management of the catalog and orders.

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