Online marketplaces ― overview

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note looks at the VAT obligations placed on online marketplaces (OMPs). This note will be useful for OMPs, as well as any business that sells goods to consumers online.

In-depth commentary on the legislation can be found in De Voil Indirect Tax Service V3.268 and V6.314.

What is an online marketplace?

The concept of an online marketplace (OMP) is important in VAT because OMPs are subject to several unique VAT obligations. Key obligations include:

•
being deemed to supply goods sold through their platforms in certain circumstances and therefore becoming responsible for accounting for VAT
•
being held jointly and severally liable for VAT debts of non-compliant sellers trading via the OMP (in particular circumstances)

For VAT purposes an online marketplace (OMP) is:

•
a website, or any other means by which information is made available over the internet
•
which facilitates the sale of goods through itself
•
by persons (ie sellers) other than the operator (whether or not the operator also sells goods through the marketplace)

VATA 1994,

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