On Thursday, 8 April, the Council of Ministers adopted the bill of an e-commerce law. It proposes amendments to the Polish VAT Law which consist in the implementation of certain solutions known as the e-commerce package.
To stop Amazon
Poland and other EU Member States are obliged to transpose into their national tax systems the solutions contained in the Union’s e-commerce VAT package. Their purpose is to overcome the barriers (and improve VAT collection) related to electronic commerce carried out by means of platforms such as Allegro or Aliexpress and other non-EU online stores which, through delivery price dumping, have been limiting the competitiveness of EU enterprises.
The planned solutions include:
- Expansion of the procedures related to VAT settlements for entities that sell goods internationally, including to business partners from other EU Member States. The planned solutions will facilitate settling the VAT in the country where the product was manufactured;
- Imposition of the obligation to collect and the pay the VAT on taxpayers who act as agents facilitating the sales of goods imported from outside of the EU the value of which is up to EUR 150. Entities based in China or Russia will have to pay an EU tax on small-value deliveries;
- More simplifications within the Mini One Stop Shop (MOSS). This will make it easier to remotely settle the tax without the need to register for the purposes of the VAT in each of the countries to which the given enterprise sells goods;
- Cancellation of the VAT exemption for purchases from outside of the EU with respect to goods the value of which does not exceed EUR 22. So far, inexpensive items (e.g. sent from China) have been VAT-exempt. This will now be replaced with cancellation of import duties for deliveries the value of which is up to EUR 150, provided that the seller taxes the sale himself in the EU.
Purpose and effects
The implementation of the above solutions is intended to increase the competitiveness of EU enterprises operating in the e-commerce sector. Today, they are clearly losing to non-EU entities—e-commerce giants that engage in price dumping in terms of sales and shipment of goods.
Through that project, the EU not only imposes restrictions, but also introduces monitoring measures. The legal regulations of all EU Member States will force suppliers from third countries to register and keep a record of the sales made in the EU. They will also have to pay the VAT on their transactions, from which they so far have been exempt.
The new regulations are a major benefit for Polish and EU enterprises that operate online stores: the facilitations in terms of VAT settlements will allow for easier filing of VAT returns concerning the sales of goods to clients from other Member States. At the same time, the regulations make it more difficult to operate for non-EU online stores, which often offer non-competitive delivery conditions. However, the costs of these solutions are likely to be covered by consumers, as non-EU stores will charge them with a higher VAT.