Changes in VAT from July 1, 2021 for online stores

In connection with the changes in VAT in ecommerce sales coming into force on July 1, 2021, we present below a brief description prepared by the law firm Arkadiusz Jaskuła, with whom we cooperate.

The changes concern transactions made by individual customers from other EU countries than the seller's country. We are in the process of preparing an update covering the following changes, it is not yet ready due to the long legislative process, the law was signed only on 28.06.2021. According to the law, a limit of 10,000 euros has been introduced for foreign transactions to which sales can take place on the existing terms.

What is changing?

The so-called e-commerce package is planned to come into force on July 1, 2021, as part of the government's draft law amending the Value Added Tax Act and certain other acts. Last Thursday, the Sejm rejected all the Senate's amendments to the VAT amendment, including the most important one, in which the Senate wanted to delay the entry into force of the law - from July 1 to September 1.

The expected changes will affect the e-commerce sector and the import of so-called small parcels from outside the European Union. The expected changes include, inter alia:

• the abolition in the EU of the VAT exemption for the import of so-called small parcels up to a value of 22 euros,
• the extension of the scope of transactions that can be settled for VAT purposes using the simplified One Stop Shop procedure.

Shipping goods to EU countries

Particularly important for entrepreneurs running online stores is the planned change in the VAT settlement of distance sales of goods to consumers from other EU countries. So far, each Member State had its own threshold for distance sales, and after exceeding it, the seller had to register for VAT purposes in the country of consumption (place of delivery of goods). Undoubtedly, this generated additional burdens in accordance with local legal requirements. After July 1, 2021, entrepreneurs making distance sales to consumers from EU countries will have a choice. After exceeding the sales threshold, unified within the EU and amounting to 10 thousand euros (42,000.00 PLN in Poland), they will be able to register for VAT purposes in the country where their consumers are located or use the OSS procedure. The new OSS procedure will enable the joint reporting of all distance transactions made in the EU within one VAT declaration.

Goods from outside the European Union

Another important change concerns so-called small purchases (imports) of goods from outside the European Union. So far, products of low value purchased by online platforms imported from non-EU countries were exempt from VAT when their value did not exceed 22 euros. It is planned to abolish the indicated exemption and in its place propose simplified rules for shipments of up to 150 euros. The most important change will be the obligation imposed on the platform to tax the sale of goods with VAT when:

• goods of a value not exceeding 150 EUR are imported from third countries by EU taxpayers to EU consumers;
• goods without a value limit are located in the EU, but are sold by a trader who does not have a registered office or a permanent place of business in the EU.

Additional information

In order to obtain answers to more detailed questions, we refer to the Tax Explanations Project for the planned e-commerce changes in VAT available on the website of the Ministry of Finance - National Tax Administration: article on www.gov.pl,We also refer to the free webinar entitled "EU VAT Package in e-commerce", which took place on June 15, 2021 and was organized by the Polish Agency for Enterprise Development as part of the Enterprise Europe Network activities: article on www.parp.gov.pl

Store Regulations and Individual Assistance

Taking into account the above changes, we have updated the Store Regulations with new and advantageous provisions from the seller's perspective, as well as clarifying certain concepts and formulations. The new regulations with the changes marked will be sent to all customers who have already purchased this service from us.

In case of any doubts in this regard and the desire to use the individual consultation service, please contact the Law Office of Arkadiusz Jaskuła: www.adwokat-jaskula.pl

Recommended Pages

• VAT changes from July 1, 2021. Store update.
• Store Regulations