If you are an e-commerce business, find out about the latest developments in VAT taxation of supplies of goods and services, generally concluded via the internet and other electronic means by end users of the Community, sent by business people or freelancers or are provided in another Member State or in a third country or territory.
These operations are subject to VAT in the Member State of arrival of the goods or the establishment of the recipient. The tax administration of e-commerce of VAT is based on the extension of the specific single-window rules, which become the specific procedure for the administration and collection of the VAT generated by these operations at Community level.
Take into account
• The current tax exemption on imports of low-value goods up to €22 of the total goods value will be abolished, leaving those who do not benefit from the single window to pay the import sales tax.
• A VAT exemption will be introduced for imports of goods that must be declared at the time of import under the Single Window Scheme for Special Imports (IOSS). It only applies to shipments whose intrinsic value does not exceed €150, excluding products subject to special taxes.
• Intra-Community distance sales of goods are taxed in the Member State where the recipient receives the goods. However, they are taxed at the place where the movement begins if these sales are made by traders established in a single Member State and their amount, together with electronic communications, telecommunications and radio and television broadcasting services performed in the Community, exceeds a common threshold at community level of €10,000. Entrepreneurs can opt for destination taxation in this case.
The Expert’s Opinion
Hector Mateos Pueyo Lawyer and Managing Partner at Mateos Legal
Hitherto, distance sales by Spanish businessmen to residents of different EU member states have generally been made at origin, i.e. Spanish VAT has been charged, unless taxation at origin has been expressly waived or certain thresholds have been exceeded in each country had been made so that they had to pay taxes in the country of destination.
However, from July 1st, the per-country thresholds will be abolished and now any business charging more than €10,000 (excluding VAT) across the EU (not state-to-state) for distance sales to consumers from member states will have to enter the EU invoice at the VAT rate that corresponds to the country in which the consumer resides.
In order to simplify the procedures, an optional “single window” system is created, which means that the employer does not have to register in each Member State where he will supply goods or services; You only need to identify yourself to the tax authorities of the country where you are resident, where you make your declarations and pay VAT. In other words, the entrepreneur has to charge the VAT corresponding to each country where the consumers are located, but declare this VAT and enter it only in the country where it is identified. This country sends this collection to the country of consumption of the good or service.
If quotas are used in distance selling in other EU countries, these quotas cannot be recognized as deductible in the country in which the entrepreneur is established, but must always be reimbursed in the country in which the sales tax is charged.
Ana González Martinez, VAT Manager, Spanish VAT Services Advisor
In recent years, e-commerce has experienced exponential growth, not just in Europe but around the world. The goal of the new VAT regulations for cross-border B2C e-commerce activities is nothing other than the simplification and harmonization of VAT taxation in e-commerce.
This new regulation introduces a general system of taxation at destination, allowing the use of two single-window systems for all operators selling goods online to final consumers residing in the Member States of the EU.
The new special regimes aim to simplify formal VAT obligations for e-commerce operators by allowing them to report all transactions covered by these regimes in a single special return and in a single EU Member State. Due to the maturity of many current business models, such as B. facilitation platforms, payment platforms and in particular the drop shippingIn our opinion, these new regulations will not achieve the long-awaited simplification, since there will be economic operators who, depending on the complexity of their transactions, will have to submit up to four different declarations and even have several tax identification numbers.
Given the technical complexity of the standard, we recommend all e-commerce operators to review their operations and be aware of their formal obligations in order to be prepared when they need to make the first statements about these regulations.