Assumptions relating to new e-Commerce regulations

From 1 July 2021, new regulations will become effective relating to VAT taxation on the so-called e-commerce, i.e. the sale of goods and certain services to consumers from other EU Member States.

The changes are introduced in implementation of EU regulations. The new e-commerce system will function throughout the European Union.

In the new e-commerce system, the rule will be to apply VAT taxation on deliveries at the place of consumption, i.e. in the country to which the goods are shipped or where the service is provided. VAT will be settled at the rates applicable in the country of consumption, so for example, selling goods to a Portuguese consumer will require determining which Portuguese VAT rate is applicable to a given product.

The threshold for entering this new system will be very low – PLN 42,000 net, calculated globally, namelyon all deliveries of goods and services covered by the new e-commerce system.

Settlement of VAT in the country of consumption will not require registration for VAT purposes in that country, as long as the seller chooses the option of VAT settlement through the so-called country of identification, in the simplified One Stop Shop procedure (OSS or IOSS). Applying for registration to these procedures is possible from 1 April 2021.

The simplified procedure will consist in settling VAT, e.g. for delivery in Germany, according to the German VAT rate, but in a VAT return filed in Poland. VAT will also be paid to Polish authorities. The new e-commerce system will have a great impact on the entire B2C sales market within the European Union.

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