If you are an online merchant, you or your accountant should be aware of this regulatory change as of July 1, 2021.
You will say to me, why make an article of it more than 6 months after its entry into force?
And you will be a thousand times right.
If I decide to talk to you about it, it is not to explain the thousand and one difficulties to understand the functioning of this new threshold, but to give you a simple and efficient tip to avoid any inconvenience in its management.
What does the reform say
I would cite a full article on the subject (fr):
Distance sales of goods are now subject to the VAT of the EU Member State of the purchaser above a certain globalized and harmonized intra-Community VAT threshold.
The same single global threshold of €10,000 includes services supplied by electronic means. Value added tax is then due in the Member State of destination.
In summary, all sales within the European Union add up to the €10,000 threshold and above this threshold, the VAT of the recipient country must be applied to the customer.
It is a real headache to keep track of this threshold and to implement the VAT change when it is exceeded in order to stay in line.
Simplification and implementation
I tell you about the solution I adopted, 7 years ago now, for the management of VAT in the European Union of the sales of my modules and services on my site PrestaToolbox.
Because yes, in this dematerialized world, this method is already in application, you can find my article on the subject of the implementation of European VAT in 2015.
If the monitoring of this threshold can be done by a module and can have fun switching from one VAT rule to another when it is exceeded, there is always the risk that this module does not do its job well and that you end up having to manage intra-community VAT payments in each country of the European Union.
It would be a shame to waste time.
Here, we are going to exploit an option of this reform, namely, to apply directly the VAT of the customer's country of destination from the first euro and to simply make a quarterly declaration on a dedicated tax portal followed by a simple transfer.
Why choose this method?
By choosing this quarterly declaration, you avoid the risk of not taking into account the €10,000 threshold at the right time and therefore you avoid any tax risk if you remember to make your declarations.
How to apply the right VAT?
On this point, I'm not going to rewrite yet another article because I already did it in 2015, so all you have to do is apply the tutorial to implement the correct European VAT.
Reporting and management
Thereafter, you will only need to register on the VAT declaration portal also known as EU VAT Gateway (fr).
There, you will be able to inform each quarter, all your sales volumes by country of the union with the corresponding VAT.
At the end of the procedure, all you have to do is make a transfer to the proposed account, making sure to include the reference number that the service gives you.
That's it, your declaration is done and you have set up a simple management to manage this new reform.
In order not to forget to make my quarterly declarations, I simply programmed a reminder on my computer, so I wouldn't forget.
But what is my quarterly sales volume by country?
To know my sales, I developed a module that automatically lists what I have to declare every quarter, this module allows me to simply make my declarations in record time every quarter.
My solution seems to be the easiest to implement and manage, although it is true that quarterly reporting can be burdensome, it has the merit of being simple.
In my opinion, even if you don't expect to exceed this threshold in your first few years, it may be worthwhile to start implementing this organization as soon as possible so that you don't have to worry about the day you will exceed it.
Of course, before implementing this management, it is preferable to have it validated by your accounting firm.