VAT services for distance sellers of goods and services

Check how to effectively conduct online sales in the EU and beyond

VAT services
for distance sellers of goods and services

The new EU rules introduced on 1 July 2021 under the e-commerce package are still generating many practical problems for online sellers. For years, KR Group has successfully supported online sellers of goods and services in settling VAT. With our presence in the region of Central & Eastern Europe, we can conduct a comprehensive assessment of the need to register for VAT on various markets and quickly analyse the possibilities for using the special IOSS and OSS procedures. We provide services for large marketplaces and also assist individual sellers and operators of their own websites. We also understand the concerns that arise when delivering cross-border telecommunications, broadcasting and electronically supplied (TBE) services. Thanks to the latest technologies and properly established monitoring processes, we eliminate potential errors and cut the time needed to prepare tax declarations.
Entry into force of the EU’s VAT e-commerce package introduced many changes. Implementation of the One-Stop Shop (OSS) scheme has a particular impact on distance sellers throughout Europe, while sellers from outside the EU must deal with introduction of the Import One-Stop Shop (IOSS).

Do I need it?

Our services will be particularly relevant if:
  • You operate B2C sales via marketplaces such as Allegro, eBay, Wish, eMag or Amazon, and exceed the threshold of EUR 10,000, or you use warehouses in other EU member states.
  • You sell services to individual customers online (streaming of content, training, SaaS applications, music or books).
  • You sell your apps via the App Store or Google Play.
  • You conduct distance sales to individual customers in other EU countries and wish to use the VAT One-Stop Shop (OSS) scheme.
  • You have a warehouse in an EU member state different from the state of establishment, from which deliveries are made to end customers.
  • You have a warehouse outside the EU from which deliveries are made to customers and you need to register in the Import One-Stop Shop (IOSS) scheme.
  • You do not have a permanent business location or establishment in any EU member state, but sell goods to end customers in EU member states.

2021 e-commerce package

The aim of the VAT e-commerce package is to tighten the collection of VAT and facilitate VAT settlements in cross-border e-commerce between businesses and consumers (B2C). Online sale of goods from one EU member state, or from outside the EU, to individual customers (B2C) in another EU member state gives rise to an obligation to settle VAT in the country of consumption
Upon fulfilment of certain conditions, it is possible to take advantage of an exception to this rule. VAT can be settled in domestic declarations when all the following conditions are met:
  • The firm’s establishment or place of business is located in only one EU member state.
  • Goods are dispatched to another member state.
  • The total value of goods and telecommunications, broadcasting and electronically supplied (TBE) services to other EU countries does not EUR 10,000 during the current financial year or the prior financial year.

Podcast

The groundbreaking, long-anticipated reform of VAT in e-commerce entered into force on 1 July 2021. Kacper Kosowicz, director of business development at KR Group, and Gerard Goliasz, senior tax specialist and tax adviser at KR Group, invite you to visit the world of changes affecting VAT on products in e-commerce.

Our Offer

Oferta KR Group w zakresie doradztwa VAT obejmuje:
Advice on distance sales:
  • Comprehensive analysis of the client’s situation in terms of distance sales.
  • Advice on selection of the model for registration and settlement of VAT on online sales to foreign consumers.
  • Advice on efficient collection of data needed for settling VAT.
  • Assistance in setting the proper VAT rates in your sales system (ERP).
  • Ensuring that the sales invoices you issue comply with local regulations.
Fiscal representation:
  • In light of the risk and responsibility associated with provision of fiscal representation services, KR Group is one of the few firms on the market that can serve as a fiscal representative in Poland, Romania and Hungary—thanks to which we share liability for the client’s tax obligations.
Support in activities related to distance sales:
  • Opening firm bank accounts in most EU countries.
  • Import One-Stop Shop (IOSS) registration, including intermediation for purposes enabling use of the special import procedure.
  • One-Stop Shop (OSS) registration.
  • EORI registration.
  • INTRASTAT service.
  • VAT registration/deregistration—KR Group is one of the few firms conducting VAT registrations in five countries in Central & Eastern Europe.
  • Monthly VAT compliance.
  • Environmental services (product fees).

Contact

FAQ

Local VAT registration—for whom?

Not every entity can take advantage of the solutions offered by the EU’s e-commerce package. If taxable activity is conducted in the country of completion of transport, the taxpayer will still have an obligation to settle VAT in the given country.

As in the case of B2B transactions which are treated as intra-Community supply of goods and intra-Community acquisition of goods, respectively, in the country of completion of transport, and also if the taxpayer has a local warehouse in another country, even if the taxpayer does not have a permanent place of business or establishment it is still required to register for VAT purposes.

How does the sale of electronic services look in practice?

There are different rules for taxpayers who offer services, rather than goods, online.

Undertakings providing services by electronic means must count on having to take into account the tax regulations of the state in which their customers are based—the place of taxation of the transaction is the place where the service recipient has its business location.

This rule applies in sectors such as:

  • Computer games.
  • Websites.
  • Subscription services.
  • Applications.
  • Content streaming.

It should be borne in mind that the regulations provide for a number of exceptions to this rule, e.g. for real estate services, lodging, passenger transport, restaurant and catering services, and short-term rental of vehicles.

VAT registrations in the CEE region.
  • Who is subject to the VAT registration obligation?
  • How long does the VAT registration process last?
  • What are the statutory deadlines for filing VAT settlements?
  • What VAT rates are applied in distance sales to Poland, Czechia, Hungary, Romania and Slovakia from other EU countries?
  • Does an e-commerce seller have to open a bank account in the country where it conducts its VAT registration?
VAT OSS—what is it and who can use it?
  • What is VAT OSS?

VAT OSS (One-Stop Shop) is a single quarterly declaration enabling a supplier making distance sales (B2C transactions) to settle VAT in all EU member states.

OSS is analogous to the system in place before, VAT-MOSS (Mini One-Stop Shop), but expands the existing procedure to include intra-Community distance sale of goods and all other cross-border services.

  • OSS declaration in a nutshell

Where?

With the tax authorities of your member state of identification—as a rule, the state in which the taxpayer is established

How?

Via a dedicated website, divided into EU member states, applying the proper VAT rate for the given member state

Who?

VAT payments are transferred by the tax authorities of the member state of identification to the tax authorities of the member state of consumption.

When?

The deadline for filing the VAT-OSS deadline is the end of the month following each quarter.

  • Is OSS registration mandatory?

Use of the procedure is not mandatory. However, VAT-OSS cannot be used selectively: joining VAT-OSS imposes on the taxpayer a duty to settle within OSS all services and supplies that can be the subject of this procedure.

Partial settlement in VAT declarations for OSS and partial settlement in national tax declarations of the member states of consumption is prohibited.

  • Who can use OSS?
    • Distance sellers of goods to natural persons from other EU member states.
    • Providers of telecommunications, broadcasting and electronically supplied (TBE) services.
    • Service providers—VAT-OSS also permits settlement of sales of other services provided to foreign (EU) consumers where the place of taxation is in the place of consumption, i.e. real estate services, short-term rental of vehicles, restaurant and catering services, access to cultural events, and lodging.
  • What is the sales threshold in the case of OSS registration?

EUR 10,000 net is the new sales threshold, replacing the previous sales limits in each member state.

Calculation of the threshold of EUR 10,000 includes the combined sum of intra-Community distance sales of goods and TBE services provided to consumers in the EU.

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

Below that threshold, undertakings making distance sales of goods to individuals in the EU can still be subject to VAT in the member state where they are established, applying the national rules.

IOSS—what is it and who can use it?
  • What is VAT IOSS?

The Import One-Stop Shop (IOSS) is a new special procedure available for sellers from outside the EU who supply goods with a value not exceeding EUR 150. Thanks to the single VAT declaration for such goods, an exemption of such goods from the VAT on imports is possible (in which case the VAT rate applied is the rate in force in the EU member state to which the

goods are delivered). To apply the IOSS procedure, all of the goods must be located outside of EU territory at the time of receipt of payment.

Important! According to the regulations, firms from outside the EU are required to appoint a fiscal representative during registration in IOSS.

  • What is the role of the fiscal representative?

The fiscal representative is jointly liable for VAT obligations. Its other duties include:

    • Registration of sellers from the EU and outside the EU in the IOSS system.
    • Filing VAT IOSS declarations.
    • Paying VAT on distance sales.
    • Representing the client before the tax authorities.
    • Maintaining the relevant registers for VAT purposes.
    • Conducting know-your-customer procedures before signing the contract.

In Poland, the following data are required for IOSS registration by an intermediary:

    • Taxpayer’s name.
    • Address with postal code.
    • E-mail address.
    • Taxpayer’s website address.
    • Tax identification number (NIP) issued in Poland or in the country of establishment or regular place of business.
  • Is bank security required?

Yes. Under the regulations, to secure clients’ obligations, a fiscal representative is required to submit a bank guarantee or pay a security deposit.

The guarantee should be issued by a bank established in the European Union. The conditions for release of the bank guarantee are agreed individually and set forth in the service agreement signed with the client.

In what field may we support you?

Complete the form and we will quickly provide you a preliminary offer

Pursuant to the Personal Data Protection Act of 29 August 1997 (Journal of Laws Dz.U. 2016 item 922, as amended), I consent to receive commercial and marketing information from KR Group sp. z o.o. sp. k. with its registered office at ul. Skaryszewska 7, 03-802 Warsaw, and to introduction into the database and processing by KR Group sp. z o.o. sp. k. of my personal data provided in this form. I also acknowledge that my consent is voluntary and that I have the right to review, correct or remove my data.

Order online advice

Pursuant to the Personal Data Protection Act of 29 August 1997 (Journal of Laws Dz.U. 2016 item 922, as amended), I consent to receive commercial and marketing information from KR Group sp. z o.o. sp. k. with its registered office at ul. Skaryszewska 7, 03-802 Warsaw, and to introduction into the database and processing by KR Group sp. z o.o. sp. k. of my personal data provided in this form. I also acknowledge that my consent is voluntary and that I have the right to review, correct or remove my data.

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