VAT settlements – electronic services and online sales

VAT settlements – electronic services and online sales – for whom?

VAT settlements – electronic services and online sales at KR Group

VAT settlements – electronic services and online sales – KR Group offer

• VAT e-commerce

  • Analysis of the company’s situation in terms of e-commerce tax obligations, taking into account B2C sales to customers in the European Union and outside it.
  • Support in selecting the VAT registration model, such as: VAT OSS, IOSS or local VAT registrations, depending on the nature of the transaction and place of consumption.
  • Organisation of data collection processes for VAT settlements, identification of key information necessary for the correct completion of tax declarations.
  • Support in incorporating VAT rates in the sales system (ERP), ensuring the correct application of VAT rates for domestic and cross-border transactions.
  • Preparation and verification of invoices in accordance with tax law requirements.
  • Tax support for cross-border transactions and digital sales.

• Tax representation

  • KR Group can act as a tax representative for VAT purposes in Poland, Romania and Hungary.
  • Support and sharing of responsibility for the company’s tax obligations.

  See more: Tax representation.

• Support in activities related to mail-order sales

  • Support in opening corporate bank accounts in European Union countries.
  • Intermediary services for IOSS registration enabling the use of the special import procedure for goods from outside the EU.
  • Support in joining OSS (One-Stop-Shop), which allows for quarterly VAT settlement on B2C sales to all EU member states.
  • EORI registration.
  • Preparation and submission of mandatory statistical declarations for intra-EU transactions (INTRASTAT).
  • VAT registration and VAT deregistration in five Central and Eastern European countries: Poland, Romania, Slovakia, the Czech Republic and Hungary.
  • Ongoing support in the area of tax settlements, verification of the correctness of documents.
  • Automated submission of ready-made XML files for JPK_VAT and VAT-UE via the KRG Portal and e-dispatch module
  • Support in the area of obligations arising from environmental regulations, relevant to the sale of physical products in e-commerce (product charge).

FAQ

• VAT support in e-commerce – who is this service exactly for?

  The offer is directed at entities conducting on-line sales. Our offer will be particularly relevant if:

  • you conduct B2C sales through marketplace platforms such as Allegro, eBay, Wish, eMAG, Temu, AliExpress or Amazon and the EUR 10,000 threshold has been exceeded, or you use warehouses in other EU countries.
  • you sell online services to individual customers (film streaming, training, SaaS system applications, music or books). 
  • you sell your applications through AppStore or GooglePlay.
  • you conduct mail-order sales to individual customers in other EU countries and want to use OSS;
  • you have a warehouse in a different EU country from the company’s country of registered office, from which deliveries to end customers are made.
  • you sell goods imported from third countries directly to consumers in the European Union (B2C), the shipment value does not exceed EUR 150 and you need IOSS registration.
  • you do not have a fixed place of business or registered office in any EU country, but goods are sold to end customers in the member states.

• Local VAT registrations – for whom?

  Not every entity can use the solutions offered by the EU e-commerce package. In the case of carrying out a taxable activity in the country where transport ends, the taxpayer is still obliged to settle VAT in that country.

  Similarly in the case of B2B transactions, which are treated as intra-Community supply of goods (ICS) and correspondingly intra-Community acquisition of goods (ICA) in the country where transport ends, and also in the case of having a local warehouse in another country – even if the taxpayer does not have a fixed place of business or registered office in that country, they are still obliged to register for the purposes of the tax on goods and services (VAT).

• What does the sale of electronic services look like in practice?

  Different rules apply to taxpayers operating in e-commerce who offer not goods but online electronic services. In such cases, entrepreneurs must take into account the VAT regulations applicable in the country where their customers are established, since the place of taxation of the transaction is the place where the service recipient conducts business activity.

  This rule applies in many sectors, including the sale of computer games, applications, subscription services, online services and streaming of digital content (content stream). However, it should be noted that the regulations provide for exceptions to this rule, concerning among other things services related to real estate, accommodation, passenger transport, catering services and short-term rental of means of transport.

• What is VAT OSS?

  VAT OSS (One-Stop-Shop) is a single, quarterly declaration that allows a supplier making distance sales (B2C transactions) to settle VAT in all European Union member states.

  One-Stop-Shop is the equivalent of the previous VAT-MOSS system, extending the current procedure to include intra-Community distance sales of goods (WSTO) and all other cross-border services.

  Use of the procedure is not mandatory. However, VAT OSS cannot be used selectively: joining VAT OSS imposes on the taxpayer an obligation to settle within OSS all services or supplies that may be subject to this procedure. Partial settlement in the VAT declaration applicable to OSS and partial settlement in the national tax declarations of the member states of consumption is not permitted.

• Who can use VAT OSS?

  • Sellers of goods at a distance to natural persons from other EU countries;
  • Entrepreneurs providing telecommunications, broadcasting and electronic services.
  • Service providers – VAT OSS will also allow the settlement of the sale of other services provided to foreign (EU) consumers whose place of taxation is the place of consumption, i.e. services related to real estate, short-term rental of means of transport, restaurant services, catering, admission to cultural events and accommodation.

• What is the sales threshold for VAT OSS registration?

  EUR 10,000 net is the sales threshold that replaced the sales limits in each member state. The calculation of the EUR 10,000 net threshold covers the total sum of intra-Community distance sales and TBE services provided to consumers in the EU.

  For entrepreneurs with a place of business only in Poland, the equivalent of EUR 10,000 has been set at PLN 42,000.

  Below this threshold, entrepreneurs making distance sales of goods to natural persons in the EU may still be subject to VAT obligations in the member state in which they are established, applying domestic rules.

• What is VAT IOSS?

  Import One Stop Shop (IOSS) is a special procedure available for sellers from outside the European Union who supply goods with a value not exceeding EUR 150. Thanks to a single VAT declaration for such goods, it is possible to exempt those goods from VAT at import (the VAT rate applied in this case is the one applicable in the given EU member state to which the goods are delivered). To use the IOSS procedure, all goods must be located outside EU territory at the time of acceptance of payment. In accordance with the regulations, companies from outside the EU are required to designate an intermediary when registering under IOSS.

• What is the role of an IOSS intermediary?

  The VAT IOSS intermediary is jointly responsible for VAT obligations. Other obligations include:

  • registration of EU and non-EU sellers in the IOSS system;
  • submitting IOSS VAT declarations;
  • paying VAT on distance sales;
  • representing the client before tax authorities;
  • maintaining appropriate VAT records;
  • conducting Know Your Customer (KYC) procedures before signing the contract.

• Is bank security required?

  Yes, in accordance with the regulations, in order to secure the tax obligations of their clients, the tax representative is required to submit a bank guarantee or pay a deposit.

  The guarantee should be issued by a bank with its registered office in the territory of the European Union. The conditions for exemption from the obligation to provide a bank guarantee are established individually and specified in the Service Agreement.

• What is the e-commerce package?

  The e-commerce package is a set of EU rules introduced on 1 July 2021, the purpose of which is to tighten the collection of VAT and facilitate its settlement in cross-border electronic trade between businesses and consumers (B2C).

  The online sale of goods from one EU country, as well as from outside the Community to individual customers (B2C) in another EU country, gives rise to an obligation to settle VAT in the country of consumption. By meeting certain conditions, it is possible to take advantage of an exception to this rule – VAT can be settled within the domestic declaration, but only if all the following requirements are met:

  • The company’s registered office/place of business is located only in the territory of one EU member state.
  • Goods are sent to another member state.
  • The total value of supplies of goods and services (TBE) to other EU countries does not exceed EUR 10,000 during the current financial year and the previous year.

  To this day, these regulations give rise to many practical problems for entities conducting on-line sales.