The VAT Digital Package (Mehrwertsteuer-Digitalpaket) primarily affects cross-border distance sales to private individuals and non-business customers. Previously, many deliveries from Germany to other EU countries could be invoiced with German VAT if country-specific thresholds were not exceeded. Now, in almost all cases, VAT is due in the country of destination. An exception applies only where all EU distance sales do not exceed the 10,000-euro threshold.
The extended One-Stop-Shop procedure (OSS) makes it possible to report intra-Community distance sales on a quarterly basis with the Federal Central Tax Office (Bundeszentralamt für Steuern). Electronic services to private individuals in other EU countries can also be reported via OSS. Non-EU businesses may also use the procedure for certain services.
The new Import One-Stop-Shop procedure (IOSS) applies to certain distance sales from third countries. For sales via electronic interfaces such as online marketplaces, a supply chain fiction may apply, which for VAT purposes treats the transaction as a supply from the distance seller to the marketplace and a supply from the marketplace to the private individual.
The previous import VAT exemption threshold of 22 euros has been abolished and replaced by a new exemption rule. The VAT consequences depend on a combination of several factors: EU residency of the business, origin of the goods, distribution channel, and value of the goods.