E-Commerce Marketplaces
How do e-commerce marketplaces manage VAT compliance for marketplace sellers?
E-commerce marketplaces are increasingly liable for VAT on sales made through their platforms under deemed supplier rules. In the EU, marketplaces facilitating B2C sales from non-EU sellers to EU consumers are liable for the VAT. This requires marketplaces to collect, calculate, and remit VAT on behalf of sellers, and to issue compliant invoices to buyers and sellers documenting the transaction split.
What does deemed supplier liability mean for marketplace VAT compliance?
Under EU deemed supplier rules (Article 14a VAT Directive), marketplaces take on VAT liability for certain sales facilitated through their platform:
- Scope: Non-EU sellers selling goods to EU consumers, or any seller selling low-value goods imported from outside EU
- Obligation: Marketplace must charge VAT to buyer, collect it, and remit to EU tax authorities
- OSS: Marketplaces can use One Stop Shop to register once in one EU state and remit all EU VAT centrally
- Documentation: Marketplace must issue buyer-facing invoice with marketplace VAT number and applicable VAT
- Seller reporting: Marketplace must report net amounts to sellers and confirm VAT was collected
Frequently Asked Questions
- What records must e-commerce marketplaces retain for VAT compliance?
- Marketplaces must retain transaction records for 10 years under EU rules. Records must include buyer and seller details, item description, delivery address, price and VAT charged, payment date, and VAT identification numbers where applicable. These records must be available to tax authorities of any EU member state on request.
- How does the EU OSS simplify marketplace VAT reporting?
- The One Stop Shop allows marketplaces to register in one EU member state and report all EU VAT due on a single quarterly return. Without OSS, a marketplace would need separate VAT registrations in each EU country where it has consumer sales. OSS covers distance sales of goods and B2C digital services. It does not cover sales where goods are located in the destination country at the time of sale.