- VAT in e-commerce and foreign sales changes from 2021
- Mail order sales
- Electronic invoices – conditions to remember
- Draft of Electronic Communication Law – expected changes
- Tax challenges for cross-border e-commerce
- COVID-19 and the e-commerce industry – what you should know
- Online intermediation services Regulation 2020/1030 – what should be kept in mind?
- E-commerce industry in full florescence
1) VAT in e-commerce and foreign sales changes from 2021
From 2021, it is mandatory for Member States to introduce changes in taxation of e-commerce, which are known as VAT e-commerce package. Each Member State has undertaken to implement the mentioned amendments in order to combat VAT fraud, seal the tax system, equate competitive differences in e-commerce and simplify tax settlements.
Making changes is associated with the accelerated development of the e-commerce market, which in recent times has sometimes been a rescue for some entrepreneurs (given the current COVID-19 period), and has not yet been adequately regulated. The European Union has therefore decided to implement uniform amendments for all Member States from 1 January 2021. The changes concern, in particular, online sellers and sellers of distance services. We encourage to familiarize yourself with the planned changes under the link:
2) Mail order sales
On 29 October 2020, a draft law amending the VAT Act on the VAT e-commerce package was published. The main objective of the amendments is to modify the VAT collection system and to facilitate the accounting of VAT in cross-border e-commerce. What are the most significant amendments to the VAT Act? First of all, the rules on mail-order sales, the new VAT-OSS procedure, the distance selling of imported goods, as well as the new VAT collection and payment obligations to be imposed on e-commerce platforms.
In the field of distance selling, the new regulations provide for the unification of the threshold for the supplier performing distance sales, which is to be the same throughout the EU and will amount to 10,000 EUR net and will apply to B2C sales in total to all EU countries. It is also planned to introduce a new definition of intra-Community distance sales of goods.
3) Electronic invoices – conditions to remember
Storing invoices in electronic form may seem convenient nowadays, but simply changing the form of an invoice from paper to electronic version may not be enough. Therefore, it is worth remembering about the provisions that indicate what conditions should be met.
Recently, the Director of the National Revenue Information has issued a tax ruling regarding VAT in the scope of storing invoices in electronic form and retaining the right to deduct input tax resulting from such archived invoices. A transport and warehousing company applied for the ruling. Due to the fact that it has documentation in paper and electronic form (invoices are sent in two forms), the company wants to resign from collecting a significant amount of paper documentation and take advantage of the possibility of storing documents in electronic form. The tax authority indicated that it is permissible to store invoices received in electronic or paper form in any way, but under certain conditions. According to Art. 106m of the VAT Act, the taxpayer determines the method of ensuring the authenticity of the origin, integrity of the content and legibility of the invoice. Authenticity of origin means certainty as to the identity of the supplier of goods or the service provider or issuer of the invoice. The integrity of the content means that the data that should be included in the invoice has not been changed in the invoice. Authenticity of origin, integrity of content, and legibility of an invoice can be ensured by any business checks that establish a reliable audit trail between the invoice and the delivery of goods or the provision of services. An example of such a business control is the possession of supporting documents (e.g. order, contract, transport documents, request for payment) related to a given commercial transaction. On the other hand, the concept of “reliable audit trail” means that it is easy to trace the relationship between the supporting documents and the transactions carried out, which is in line with the procedures established in the company and is reflected in the processes that actually took place. In addition to using business controls, the legislator also indicates the possibility of using a qualified electronic signature or electronic data interchange (EDI) in order to maintain the authenticity of the origin and integrity of the content of the electronic invoice.
Additionally, it should be remembered that sending an electronic invoice to customers requires prior approval by the recipient (Article 106n of the VAT Act).
Tax ruling of 13th August 2020 sign. 0114-KDIP1-3.4012.333.2020.2.JG.
4) Draft of Electronic Communication Law – expected changes
Pursuant to the EU directive, the European Code of Electronic Communications of 11 December 2018, within December 21, 2020, changes shall be implemented in the field of electronic communication. replacing the existing regulations (Telecommunications Law).
Considering the current situation in the world and the use of such opportunities as remote work or distance learning, the changes introduced in the regulations governing electronic communications should not come as a surprise. The presented project aims to regulate issues such as the performance of activities consisting in the provision of electronic communication services and regulating their markets, as well as the rights and obligations of users, the rules of telecommunications data processing and the protection of electronic communication secrets. In addition, these provisions are to regulate such issues as entry in the register of telecommunications undertakings and the register of local government units, the operation of multiplexes, interpersonal communication service, sending unsolicited commercial information, direct marketing or cookies. The website of the Government Legislation Center also features a draft act introducing the Electronic Communication Law.
You can follow the further legislative process here: https://legislacja.gov.pl/projekt/12336501
5) Tax challenges for cross-border e-commerce
The mandatory closure incl. of shopping malls has led to the situation of many entrepreneurs deciding to trade goods on online platforms. Undoubtedly, during this period, the e-commerce market gained momentum.
Thus, by addressing the issue of cross-border e-commerce, in recent months it has gained considerable popularity due to its ease of use and wide trade. This not only made it easier for consumers to verify the product in detail before purchasing it compared to other platforms, but also made it easier for many people to discover the many advantages of making an online purchase. Market analysis indicates that in the near future the e-commerce market will dominate other sectors and the existing ones may also switch to such a platform. Moreover, cross-border online trading benefits the seller, who is given the opportunity to expand his channel of customers, but also the buyer, who reduces his time spent on actual purchases.
The issues relevant to cross-border e-commerce incl. what should be taken into account when deciding on such activities, whether call-off-stock magazines are an opportunity to deal with in terms of determining the place of taxation and what limits of goods should be strictly remembered.
6) COVID-19 and the e-commerce industry – what you should know
As the market analysis points out, March 2020 was a breakthrough for e-commerce, which was when there was a record increase in sales in this industry compared to December 2019. It should be noted here that December is considered the best month of the year for shopping due to the holiday shopping frenzy and the ‘Black Friday’ sales. Interestingly, initially the increase was recorder for the sale of FMCG (Fast Moving Consumer Goods) products, while later the increase in interest also involved other products. As you can see, moving the stationary business to e-commerce is now becoming, increasingly beneficial.
It is therefore important to know, first of all, the legal and tax consequences of e-commerce, which differ from those of stationary activities: issues of issuing e-receipts and online cash registers and details on the date of mandatory exchange of cash registers for online cash registers.
As you can see, the e-commerce industry focuses primarily on facilitating existing responsibilities, thereby introducing elements of computerization into the business. In view of the ever-increasing interest and willingness to develop e-commerce, incl. through the COVID-19 virus epidemic and the introduction of restrictions on movement and accessibility to certain stationary store, it is necessary to familiarize yourself with the obligations faced by the entrepreneur when deciding to trade online. Thus, we encourage you to familiarize yourself with both the first and second parts of the article on the e-commerce industry during the COVID-19 period.
7) Online intermediation services Regulation 2020/1030 – what should be kept in mind?
EU Member States committed themselves in July 2020 to adopt Regulation (EU) 2019/1150 of the European Parliament and of the Council on the promotion of fairness and transparency for business users using online intermediation services (hereinafter: Regulation). What was the purpose and why was it intended?
First of all, the main objective was to strive for transparent and fair rules for the operation of online sales of services and goods. The Regulation regulates appropriate and transparent conditions for online platforms offering goods and services. It should be pointed out that, until the Regulation, many entrepreneurs faced unambiguous legal regulations in this area, and small and medium-sized enterprises operating in online intermediary could not conduct their internet activities reliably. The Regulation was intended to eliminate these many problems – was it really successful? We explain this below:
8) E-commerce industry in full florescence
According to statistics, there are about 28.2 million internet users in Poland, of which 73% have made or declare to make purchases online in the near future. According to data, 72% of internet users shop in Polish online stores, while the rest of them use foreign platforms. Moreover, the statistical consumer who makes online purchases is a person up to the age of 34, living in the city, having a higher education and having a good financial situation. In addition, the increase in the popularity of online platform purchases is justified primarily by the COVID-19 pandemic, and in the further period, according to the data, around 71% of respondents remain concerned about the next wave of coronavirus and the re-introduction of restrictions. This leads, above all, to the conclusion that the e-commerce market will continue to grow, as evidenced by the continued growth of consumers online.