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Ecommerce platforms may come under new VAT liability rules

Wednesday 13 September 2017 | 01:59 PM CET

New proposed EU legislation could hold ecommerce platforms and online retailers accountable for uncollected VAT from companies whose items they sell.

A new bill could impose stricter liability rules for ecommerce retailers, reports who obtained a working document. Several diplomats from different EU countries have backed the changes to the bill, but Croatia, Finland, Poland and Slovenia opposed the proposal. 

The new legislation changes have not been approve, as all 28 member states must unanimously agree on any EU-wide legal changes related to tax. If the bill passes, online marketplaces and platform will have to collect VAT on behalf of their vendors. This also applies to companies not registered in the EU. 

An online retailer in the EU that uses its warehouses to distribute products from firms outside the bloc could be held “jointly and severally liable for payment of VAT” under the proposed rules. Member states would be able to exempt retailers from paying VAT on behalf of their vendors if they can prove that they “acted in good faith” and made sure that those companies paid VAT in EU.  

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