The e-Commerce VAT package of the EU introduces simplification measures for intra-EU sales of electronic services from 2019 onwards, and also extends by 2021 the Mini One-Stop Shop to a One Stop Shop. Furthermore, new rules for electronic interfaces such as marketplaces or platforms will be introduced, which deem them for VAT purposes (in certain scenarios) to be the supplier of goods sold to customers in the EU and make them collect and pay the VAT on these sales.
Detailed implementation rules have been published în December on:
- the extension of the scope of the Mini One Stop Shop (MOSS) to all types of services as well as to intra-community distance sales of goods and distance sales of imported goods from third countries – turning the MOSS into a One Stop Shop; and
- the introduction of special provisions applicable to operators of electronic marketplaces, platform, portal or similar means with the effect that the these persons may be deemed to have received and supplied the goods itself applying from 1 January 2021.
The Proposal is available via this LINK and contains more detailed explanations of the following specific provisions.
Indirect intervention of the supplier in the dispatch or transport
Art 14 (4) of the VAT Directive, as amended by the VAT e-commerce Directive, defines distance sales of goods both for intra-community and import, which also covers supplies of goods where the supplier indirectly intervenes in their dispatch or transport to the customer. A new provision added to the Regulation defines the meaning of “indirectly” to clarify when the supplier will be considered to have dispatched or transported the goods.
Provisions relating to electronic marketplaces
Art 14a and 242a of the VAT Directive, as amended by the VAT e-commerce Directive, introduce specific provisions for electronic interfaces such as marketplaces, platforms or portals facilitating certain supplies of goods or services made by other taxable persons.
The necessary implementation rules for the application of these provisions include the following elements:
- definition of the situation where a taxable person is considered to facilitate sales of goods or services made by other taxable persons through the use of an electronic marketplace;
- specific provisions on the conditions for determining when the payment is accepted to determine in which taxable period supplies by taxable persons facilitating supplies of goods in the Community through an electronic interface should be declared;
- the type of information to be kept in the records of taxable persons facilitating supplies of goods and services in the Community through the use of an electronic interface.
A good faith provision is added for the benefit of electronic marketplaces being dependent on the accuracy of information from the suppliers or third parties: an electronic interface shall not be held liable for any VAT due in excess of that declared where it can demonstrate that it did not know or could not reasonably have known that the information was incorrect.
Every seller through the interface is presumed to be a taxable person and his customer a non-taxable person. This releases the interface from the burden of having to prove the status of the seller and the customer. This presumption can, however, be rebutted by the electronic interface, if it has information to the contrary.
Provisions relating to the extension of the scope of the One Stop Shop
For the most part, these provisions are required for the proper functioning of the Mini One Stop Shop, following the extension of its scope. However, a number of changes are proposed which go beyond the mere alignment of these provisions to the extension of the Mini One Stop Shop, such as clarifying that:
- the use of an identification number allocated to an intermediary to handle distance sales of goods imported from third countries is an authorization enabling him to act as intermediary and cannot be used by him to declare VAT for taxable transactions outside the Import One Stop Shop regime;
- so far, if a taxable person voluntarily ceases using the Mini One Stop, it was excluded from the Mini One Stop Shop in any Member State for two calendar quarters. This provision is removed;
- the current system of making corrections (resubmitting the VAT return of the tax period to which the corrections relate) will be kept in place for MOSS VAT returns relating to the periods from the 4th quarter of 2017 to the fourth quarter of 2020: the new VAT e-commerce Directive provisions, which allow making corrections to previous One Stop Shop returns within 3 years in a subsequent VAT return, will apply for VAT returns submitted from 1 January 2021 onwards; and
- the need for the name of the customer has been removed.
The measures will apply from 1 January 2021. Taxable persons are provided with the possibility to register for the One Stop Shop as of 1 October 2020 to allow them to make use of it from 1 January 2021.
For further information or assistance, please contact your PwC VAT adviser.