Poland: Legislative measures implementing EU VAT directives for e-commerce transactions
Poland: EU VAT directives for e-commerce transactions
A bill to amend Poland’s value added tax (VAT) law would transpose into Polish law certain measures from EU directives.
Council Directive (EU) 2017/2455 and Council Directive (EU) 2019/1995 introduce measures that are referred to as the "VAT e-commerce package" and are intended to revise the VAT collection system and tighten tax collection for cross-border electronic trade between companies and consumers (business-to-consumer or B2C).
In Poland, the bill to transpose the directives into Polish law is pending certain legislative stages, but the anticipated effective date would be 1 July 2021 (the deadline for the implementation of the directives introducing the VAT e-commerce package is 30 June 2021).
Amendments related to remote (distance) sales
Currently, suppliers making remote or distance sales (i.e., sales by means of cross-border trade with EU consumers, commonly referred to as “B2C sales”) and that do not exceed a sales threshold set separately by each EU Member State may decide to charge local VAT in the country of supply. However, once the sales threshold is exceeded, the supplier must register for VAT purposes and settle VAT in the country to which the goods are shipped (that is, the country of destination).
New provisions would harmonize the remote-selling threshold throughout the EU at the amount of €10,000 (net) with regard to the total value of the supplier's B2C cross-border sales of goods within the EU (currently, the threshold in the EU Member States cannot be less than €35,000 and cannot be greater than €100,000).
Also, the term “intra-Community distance sales of goods” would be defined.
A reduction of the selling threshold for remote sales would extend to groups of entities making intra-Community remote sales of goods and thus required to register for VAT purposes in the EU countries of destination. However, the VAT registration obligation could be waived by applying the new VAT-OSS (one-stop-shop) scheme.
New special procedure—VAT-OSS
New rules would extend and amend the mini-one-stop-shop (MOSS) scheme that currently applies with regard to telecommunications, broadcasting, and electronically provided services, and would introduce a one-stop-shop (OSS) system.
Application of the VAT-OSS procedure would be optional. Accordingly, it would be possible to settle VAT on intra-Community distance sales of goods and on all types of cross-border B2C services, with the place of supply being the EU Member State where the goods are consumed (up to now, this treatment was possible solely for electronically supplied services or services of a similar kind).
Certain advantages of using the VAT-OSS mechanism include:
- The possibility of electronic registration for VAT purposes in a single EU Member State, thereby avoiding an obligation to register for VAT purposes in multiple EU Member States to which goods or services are sold
- The availability to settle VAT by means of a single return submitted electronically to the EU Member State “of identification” (establishment) but subject to the VAT rates that apply in the consumer's country
- Cooperation with the tax authorities of the EU Member State of identification even in situations of cross-border sales
Remote sales of goods imported from third countries
The legislation defines remote or distance sales of goods imported from third countries or jurisdictions as supplies of goods from a third country to an ultimate end-user customer in an EU Member State. Currently, these sales have no separate identification; are all perceived as imports of goods; and in some situations, are eligible for a VAT exemption.
Effective 1 July 2021, the exemption from VAT for imported goods in consignment arrangements and having a value not exceeding €22 would be revoked in all the EU Member States (in Poland, the VAT exemption has been already revoked for e-commerce transactions).
For remote sales of goods imported from third countries (via consignments) having a value not exceeding €150, the import-one-stop-shop (IOSS) could be used to declare and settle the VAT liability. Unlike the situation under the current rules regarding the VAT treatment of imported goods (when VAT is collected by the customs authority at the time of import), under the IOSS, the supplier/ electronic interface operator would calculate and collect VAT at the time of the sale of the goods and then declare and remit the globally calculated tax in the EU Member State of identification. Consequently, on import, the goods would be exempt from VAT which in turn would allow for their immediate release by customs, given that under the IOSS regime, VAT is to be collected upon the sale of goods.
The IOSS procedure provides a range of VAT obligation simplifications to taxpayers including the ability for:
- Electronic registration for VAT purposes in the EU Member State of identification
- Declaration and payment of VAT by means of a single monthly return submitted in the EU Member State of identification
In order to use the IOSS scheme, a taxable person not established in the EU would need to appoint a representative, whose duties would include responsibility for settling VAT on remote sales of goods imported from third countries.
The supplier/electronic interface operator that decides not to use the IOSS system would still be able to apply the other simplification scheme available for imported goods. Import VAT could be collected from consumers by the entities making the customs declaration (such as the postal operator or delivery company), and that entity would remit the VAT to the customs authorities in the form of a monthly settlement (under special arrangements for declaration and payment of import VAT).
New duties in respect of VAT collection and remittance for e-commerce platforms
Another provision under the legislation relates to entities that facilitate the supply of goods through the use of electronic interfaces—such as marketplaces, platforms, portals or application programming interfaces (APIs). These entities would be required to collect and remit VAT on:
- Sales of goods to EU consumers, of a value not exceeding €150, and imported from third countries in consignment arrangements
- Remote intra-Community sales of goods or other supplies of goods to non-taxable persons, but only when these transactions are conducted by suppliers not established or without a fixed establishment within the EU
Consequently, the burden or duties attached to the supply of goods would be transferred from those that are often referred to as “base suppliers” to the electronic interface operators that would then be required to keep electronic records on such transactions. These electronic interface operators would be able to take advantage of simplified VAT settlements on the same terms as other taxpayers engaged in transactions of this type (under the OSS and IOSS schemes). The responsibility would fall on the electronic interface operator regardless whether it is established or has a fixed establishment in the EU or in a third country.
Other specific provisions
The legislation also includes certain other related provisions such as:
- Detailed rules on VAT settlement under OSS and IOSS regimes
- Determination of a specific tax point in the case of supplies of goods made via e-commerce platforms
- Determination of the place of delivery for remote sales of goods imported from third countries
- Introduction of new rules for issuing invoices for intra-Community remote sales of goods and remote sales of goods imported from third countries
- Requirement for e-commerce platforms to keep additional records
Read a November 2020 report [PDF 334 KB] prepared by the KPMG member firm in Poland
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