The Draft Amendment of August 31, 2020 is published, introducing modifications to the VAT Law, as a result, the taxation of supplies of goods and services contracted by electronic means by Community end consumers is regulated, and which are provided by professionals not established in the Member State where, according to the rules of location of the tax, the referred operations would be located.
In light of this, a new system has been designed to modernize and facilitate the VAT of e-commerce. This system is mainly based on the extension of the one-stop store for e-commerce services, telecommunications, television and other services provided by electronic means, and in the reform of the community regime of distance sales. Also, in order to give more facilities in the management of the tax, it marks a common threshold for small companies whose market is based on digitalization. Similarly, the VAT exemption for imports of small consignments from non-EU customers is abolished.
Below, are the main new features introduced by the Draft Amendment:
- Two new optional special single window regimes are defined in relation to two new categories of goods:
- Distance sales of goods imported from third countries or territories to final consumers established in a Member State
- Intra-Community distance sales (dispatched by the supplier from one Member State to another), which would be taxed at destination.
- Option to apply the special regime of one-stop shopping for distance sales of imported goods whose intrinsic value does not exceed 150 euros
- Exemption from VAT on imports of goods that must be declared at the time of importation under the special single window regime
- Incorporation of three new special one-stop schemes for the declaration and settlement of VAT due on the supply of goods and services:
- External regime of the Union, whose applicability concerns the services rendered by professionals not established in the Community to recipients who do not have the condition of professionals
- Union regime, applicable to services rendered by professionals established in the Community, but not in the Member State of destination where they will be consumed by individuals
- Import regime, applicable to distance sales of goods imported from third countries or territories, which may be used by professionals who carry out distance sales of goods imported from third countries with a value not exceeding 150 euros.
As this is a very complex issue, in case you are interested in learning more about it or have any other questions about the new VAT regime, we recommend that you contact our team of experts at Arintass.
Víctor Sáez