VAT Rules for E-Commerce – Implementation in Cyprus

As of 1 July 2021, the EU VAT e-commerce rules came into force in Cyprus, introducing changes that expanded the Mini One-Stop-Shop (MOSS) into the broader One-Stop-Shop (OSS) and implemented the Import One-Stop-Shop (IOSS). The key features are:

  1. Harmonized Threshold:

    • A new harmonized threshold of €10,000 for the place of supply of distance sales of goods within the EU and the supply of telecommunications, broadcasting, and electronically supplied services. Below this threshold, the VAT rate of the Member State of the supplier applies.

  2. Extension of OSS:

    • The OSS was extended to cover:
      • All B2C services supplied across the EU.
      • Distance sales of goods within the EU, including telecommunications, broadcasting, and electronic services.

  3. Online Marketplaces and Interfaces:

    • Online marketplaces and electronic interfaces facilitating B2C sales of goods are considered deemed suppliers and are responsible for collecting and paying VAT when they facilitate the transaction (e.g., issuing the invoice or managing transportation).

  4. Introduction of IOSS:

    • The Import One-Stop-Shop (IOSS) is a new portal for VAT compliance for distance sales of imported goods valued at up to €150 per shipment. Shipments exceeding €150 are not eligible for the IOSS.

  5. Abolition of Low-Value Import Exemption:

    • The exemption from VAT for low-value imports (goods valued up to €22) has been abolished, meaning all imports into the EU are now subject to VAT.

  6. Simplification Mechanism:

    • A simplification mechanism has been introduced for postal operators and couriers to collect VAT on imports valued at up to €150 when neither the IOSS nor the OSS is used.

These changes aim to harmonize VAT rules across the EU, simplify compliance, and ensure that VAT is collected on all cross-border transactions.

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