Online Marketplaces and VAT Liability in the EU: The Current Position (2026)

The period of relative regulatory freedom for online marketplaces is firmly over. What was once a grey area — with platforms like Amazon operating largely outside the scope of VAT liability for the sales they facilitated — has now been comprehensively addressed by EU legislation, national rules, and a new wave of digital reporting requirements.

From liability notices to full deemed supplier rules

The liability regime for online marketplaces that Germany introduced in 2019 — requiring platforms to block sellers who failed to demonstrate VAT compliance or risk being held jointly liable — was an early signal of the direction of travel. Austria followed with its own equivalent rules from 1 January 2021, placing similar data-sharing and co-liability obligations on platforms operating there.

Both of those national measures have since been substantially superseded by a far broader EU-level reform.

The July 2021 EU e-commerce VAT reform: the key shift

From 1 July 2021, the VAT rules on cross-border business-to-consumer e-commerce activities changed fundamentally across the EU. The reform introduced the deemed supplier model, which replaced the patchwork of national liability rules with a harmonised EU framework. 

Under the deemed supplier model, when an online marketplace facilitates qualifying sales, the platform is treated as if it purchased the goods from the seller and then resold them to the final customer itself — even if the physical movement of goods still happens directly between the original seller and the consumer. EU VAT law creates a two-step legal fiction for qualifying transactions. 

The two key scenarios where a marketplace becomes the deemed supplier are:

• Imports of low-value goods (up to €150) from outside the EU, sold to EU consumers — the platform is responsible for collecting and remitting VAT, typically through the Import One Stop Shop (IOSS).
• Sales by non-EU sellers of goods already located inside the EU to EU consumers — the platform again steps into the role of VAT collector regardless of transaction value.

For sellers in these scenarios, the practical consequence is that VAT on qualifying transactions is handled by the platform. The seller makes what is treated as an exempt B2B supply to the marketplace. However, sellers remain responsible for providing accurate data to the platform, and continue to have their own VAT obligations for transactions falling outside the deemed supplier rules — including domestic sales and intra-EU transactions between VAT-registered businesses.

Distance selling thresholds abolished and replaced by OSS

The old country-by-country distance selling thresholds — including the €35,000 threshold for deliveries to Austria that applied under the pre-2021 rules — were abolished from 1 July 2021. They were replaced by a single EU-wide threshold of €10,000 for cross-border B2C sales. Once this is exceeded, VAT becomes due in the customer’s country. The One Stop Shop (OSS) allows sellers to report and pay this VAT through a single quarterly return filed in their home Member State, eliminating the need to register in each destination country for qualifying distance sales.

DAC7: platforms must now report seller data annually

On top of the deemed supplier rules, DAC7 — the EU Directive on Administrative Cooperation — came into force on 1 January 2023. It requires digital platforms to report detailed seller data to tax authorities annually, including identity information, transaction volumes, and payment amounts. Tax authorities across the EU share this data automatically, enabling cross-checking against VAT returns and significantly tightening enforcement. 

Low-value customs duty: new charge from 1 July 2026

One further development affects sellers and platforms handling imports of low-value goods. From 1 July 2026, the EU abolished the customs duty exemption for consignments valued at €150 or less. A temporary flat-rate customs duty of €3 per item now applies to all such shipments imported from outside the EU, in addition to VAT, until 1 July 2028. Sellers and platforms using IOSS should ensure their pricing and customer communications reflect this additional charge.

What comes next: ViDA

The EU’s VAT in the Digital Age (ViDA) package, formally adopted in March 2025 and in force from April 2025, extends the deemed supplier model further. From 1 July 2028, platforms facilitating short-term accommodation rentals and passenger transport by road will become deemed suppliers for VAT purposes, with mandatory compliance required by 1 January 2030. Broader OSS reforms and mandatory digital reporting requirements for cross-border B2B transactions follow from 2028 and 2030 respectively. 

The regulatory direction is clear: platforms can no longer function simply as neutral intermediaries. Across data reporting, VAT collection, and customs compliance, the obligations on online marketplaces have grown substantially — and continue to grow.

If you have any queries or questions, please do not hesitate to contact amavat®. To find out more information please visit www.amavat.eu