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June 25, 2020 EU reaches agreement on postponement of VAT e-commerce rules due to COVID-19 crisis Following an earlier proposal by the European Commission to address the severe disruptions resulting from the COVID-19 pandemic, the European Union (EU) Member States’ ambassadors to the EU reached a preliminary agreement on postponing by six months the application of the VAT regime applicable to online companies – as of 1 July 2021, instead of 1 January 2021. The postponement should be formally adopted by the Council of the European Union, without further discussion, once the text has undergone a legal and linguistic review. This means that, assuming the Council will adopt the proposal as expected, the EU VAT e-commerce measures will apply with effect from 1 July 2021. EU e-commerce VAT changes The 2021 e-commerce VAT changes include the following measures:
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