Distance selling thresholds will be removed as part of the EU VAT overhaul in 2021. As of July 1, VAT will not only apply to intra-community distance sales with turnovers of over 35,000 euros per year, or 100,000 to Germany, the Netherlands, and Luxembourg over the same period.
The mandatory change will affect any business carrying out intra-community distance sales (which means where goods are sold and the sale involves a company transporting them from one member state to consumers in another), regardless of whether they opt to use the new IOSS or otherwise. Please note, any business-to-consumer service sale subject to destination VAT will be reported through IOSS.
The new EU VAT rules will also mean the end of the low-value consignment relief (LVCR), which gave tax exemption for all imports valued at 22 euros or less. This new rule aims to create a level playing field for domestic and non-domestic sellers.