Czech Republic: “Deemed supplier” concept, e-commerce and VAT

Czech Republic: “Deemed supplier” concept

The treatment of electronic interface operators for value added tax (VAT) purposes is proposed to change beginning 1 July 2021. In connection with a planned amendment to the VAT law relating to e-commerce, “e-shops” (platforms) engaging in the sale of goods from foreign suppliers would need to assess whether they are operating as “deemed suppliers.”


Platforms (electronic interfaces, portals, e-shops) facilitating remote or distance sales of goods beginning 1 July 2021 would be deemed suppliers for VAT purposes when specific taxable supplies are concerned. This designation also would affect the responsibilities for paying VAT on such transactions and keeping relevant records. Among the criteria used to determine deemed supplier status are the following:

  • Parameters of the given platform
  • Status of the original supplier
  • Place from where the goods are dispatched

Any restrictions to the platform’s responsibilities would be subject to strict requirements and would only apply to the potential difference between the VAT amount paid and the VAT amount set by law.

A key question would be whether the platform facilitates distance sales of imported goods of “low value” (i.e., goods with a value not exceeding €150) or remote sales of goods to end-customers by suppliers not established in the EU. The EU regulation implementing the VAT directive provides a “negative” definition of platforms (e-shops) that facilitate the sale of goods and may be treated as deemed suppliers. Only a platform (or e-shop) that fulfils all of the following conditions will not become a deemed supplier for selected sales:

  • The platform does not set, directly or indirectly, any of the terms and conditions under which the sale is effected.
  • The platform is not involved, directly or indirectly, in authorising the fee charged for the sale.
  • The platform is not involved, directly or indirectly, in ordering or delivering the goods.

Platforms or e-shops that only process payments, advertise goods or redirect those customers interested in goods to other electronic interfaces also will not be treated as deemed suppliers.

Read a March 2021 report prepared by the KPMG member firm in the Czech Republic

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