From the 1st January 2021, the transition period will be over, and Brexit will be in place.
This means that there will be changes to the way that online UK businesses can operate with EU businesses. The changes will affect the eCommerce Directive, a legal framework that allows eCommerce companies in the EEA (European Economic Area) to operate in any other EEA country and follow their local VAT rules.
What will happen once we leave the EU?
As we are leaving Europe, the eCommerce Directive will no longer apply to eCommerce companies in the UK. Your company may already comply with the new requirements to operate in EEA countries, but it is worth double-checking.
To make sure that your business is in line with the new changes, you may need to take steps to ensure that the company is VAT compliant within the countries you operate in.
Which businesses will be affected?
According to the government’s guidance, you should first check whether your company is considered an online service provider. This doesn’t just include online shops, social media platforms, payment services and other internet services may be affected.
How to find the new legal requirements
Businesses that are located in the UK should check the ‘coordinated field’ within the eCommerce Directive to see which new rules may need to be followed. Legal rules on online services including sharing online information, advertising, shopping, and contracting will need to be checked for each EEA country your company operates in.
This could also include having to follow authorisation procedures, such as licensing requirements.
To find out more on how to prepare your business, read the latest guidance.