A practical guide to e-commerce VAT - part 2
The solutions implemented by the amendment package of the so-called ‘E-commerce VAT’ are also aimed at tightening the VAT system on import transactions and preserving fair competition practices for businesses from EU countries.
The Ministry of Finance, in the tax explanations, has also analysed and indicated practical examples of how to account for the import of goods, in particular concerning the so-called small consignments (with value of up to EUR 150)
1) IOSS – import one-stop shop
- The IOSS will enable taxpayers making supplies of goods dispatched from third countries to consumers (B2C) located in Member States where those taxpayers have no establishment to declare and pay VAT in their country of identification. In practice, the taxpayers who register for the IOSS will be required to submit VAT returns and pay tax due only in the country of identification, avoiding the registration, and filing and reporting obligations in each EU country to which goods are delivered.
- The IOSS procedure may be used if the following conditions are met:
- The actual value of the goods in a single consignment does not exceed EUR 150,
- The goods are dispatched or transported by or on behalf of the supplier to a buyer-consumer (B2C) in the EU,
- The goods are not subject to excise duty.
- Under the import procedure, the VAT due on DSIG can be declared and settled.
- If the taxpayer does not have a place of business or a fixed establishment in an EU state, then it is obliged to appoint an intermediary who is an active VAT taxpayer in the Member State of identification.
2) DSIG (PL – SOTI) – distance sale of imported goods
- DSIG is defined as a distance sale of imported goods from the territory of a third country to a buyer located in the territory of a Member State, if the following conditions are met:
- The supply is made to a taxpayer or a legal person who is not a taxpayer (not settling ICS) or to a consumer,
- The subject of supply is not new means of transport or goods that require installation or assembly.
- The condition is the participation of the supplier (in direct or intermediary manner) in the transport or in the dispatch of goods,
- The place of supply shall be the place where the dispatch or transport of the goods ends where:
- The country of importation is not the country of destination of the goods,
- The country of importation is also the country of destination of the goods, provided that the VAT due under the DSIG is declared under the IOSS (Import One Stop Shop) procedure.
- In other cases, the place of supply is the place where the goods are located when dispatch or transport begins.
- The tax obligation arises in compliance with the internal regulations of the country in which the transaction is taxed. The exception is the supply covered by the import procedure (IOSS), in which case the tax obligation arises at the time of supply.
- The obligation to issue invoices depends on whether the business makes use of the EU's OSS procedure and therefore the VAT invoice exemption, or whether it does not make use of the EU's OSS procedure and is obliged to issue a VAT invoice according to the rules of the country in which the place of taxation is situated and according to the applicable tax rates.
- DSIG taxed in Poland constitutes a supply of goods for the purposes of reporting in the JPK_V7M (SAF-T) file and must be recorded by a cash register.
3) „USZ” Regulation (Specific Regulation)
- The „USZ” regulation applies to goods:
- delivered to consumers in Poland,
- the value of which does not exceed 150 EUR per consignment,
- not subject to excise duty,
- released for circulation in the EU state where the dispatch or transport ends.
- The ‘USZ’ settlement is available to persons declaring their goods purchased under DSIG with the value up to EUR 150 to the customs authorities which are responsible for the collection of the tax.
- The ‘USZ’ procedure is elective for operators.
- An operator is obliged to keep records of delivered and undelivered shipments and to collect the import VAT due not later than at the time of delivery of the shipment to the consignee and to pay this tax on the basis of the customs declaration.
The publications concerning the E-commerce VAT package present the most important issues. However, in the event of conducting a business connected with e-commerce transactions, we recommend that your business be analysed individually. Our experts will determine the possibility of using the new E-commerce VAT package in your company.
Martyna Przegalińska, Tax Consultant, ATA Tax Sp. z o.o.
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