Nowadays, e-commerce is becoming more and more popular. With the development of this sector, new tax regulations are also emerging, which are aimed at tightening the VAT system. One of such solutions is the VAT package for e-commerce. What exactly is this package and who does it apply to? In this article we will try to answer these questions and provide you with the most important information on this topic.
What is the VAT package for e-commerce?
The VAT package for e-commerce is a set of regulations introduced in the European Union, aimed at tightening the VAT system in the sale of goods imported from outside the EU and simplifying the settlement of VAT by EU taxpayers for services provided to consumers in the EU. The introduction of these regulations aims to increase the transparency and effectiveness of the tax system and ensure fair competition on the e-commerce market.
Where are the regulations governing the VAT package for e-commerce?
The provisions regarding the VAT package for e-commerce have been implemented under European Union law. These include Council Directive (EU) 2017/2455, Council Directive (EU) 2019/1995 and Council Implementing Regulation (EU) 2019/2026. These directives introduce changes to the VAT Directive, which is addressed to EU Member States and obliges them to introduce appropriate national regulations. However, the Implementing Regulation introduces changes to Implementing Regulation 282/2011. These regulations apply to taxpayers along with the provisions of the Polish VAT Act.
When do the changes come into force?
The changes resulting from the VAT package for e-commerce entered into force on July 1, 2021. This means that from then on, taxpayers must comply with the new e-commerce regulations.
Who does the changes affect?
The provisions of the VAT package for e-commerce do not apply to all taxpayers operating in the e-commerce industry. They mainly concern VAT payers based in Poland and who do not have a permanent place of business in another EU country. However, it is worth remembering that each taxpayer should carefully check whether the changes apply to him or her in order to avoid possible legal consequences.
Check if the changes apply to you
To determine whether the changes resulting from the VAT package for e-commerce apply to you, you need to answer a few questions:
- Do you provide services to non-VAT payers, for example consumers living in other EU countries?
- Do you sell goods to consumers residing in the EU or entities that do not settle intra-EU transactions and the goods are transported between two EU countries?
- Do you sell goods to consumers residing in the EU or entities that do not settle intra-community transactions and the goods are transported to the EU from a third country?
- Are you an entity operating an electronic interface, such as a trading platform or portal?
If you answered YES to any of the above questions, there is a high probability that the changes resulting from the VAT package for e-commerce apply to you.
What are the consequences of the VAT package for e-commerce?
The VAT package for e-commerce aims to tighten the VAT system and facilitate VAT settlement by taxpayers. It introduces a number of changes that may affect the way e-commerce activities are conducted. Here are some of the most important consequences that could result from this package:
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Obligation to register for VAT in the destination country - if you sell goods or services to consumers in other EU countries, you may be required to register for VAT in those countries. This means you have to settle VAT in different jurisdictions.
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New rules regarding the place of taxation - the VAT package for e-commerce introduces new rules determining the place of taxation of transactions. Depending on the type of transaction, different VAT rates and other regulations may apply.
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Obligation to provide data - taxpayers covered by the VAT package for e-commerce will be obliged to provide appropriate data regarding their transactions. This is intended to increase the transparency of the tax system and facilitate inspections by tax authorities.
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New obligations regarding documentation - the VAT package for e-commerce also introduces new obligations regarding maintaining tax documentation. Taxpayers will need to keep appropriate documents that will allow tax authorities to verify compliance with VAT rules.