In 2021, changes regarding the methods of settling VAT in the EU will be introduced. The package of regulations will be aimed at entrepreneurs in the e-commerce sector, who focus on selling goods and providing services online. The Polish government is already working on the implementation of the package. So what will the new VAT…
The e-Commerce package for online traders
According to the EU directive, entrepreneurs conducting trade online should expect some changes in VAT settlement methods in the second half of 2021. The alterations include the standardisation of VAT declarations in the form of VAT-OSS. The e-commerce package aims at facilitating international trade and providing entrepreneurs with equal opportunities on the European market. The most significant objective of the proposed modifications is creating a single digital market for all member countries. The cause of these modernisations is the rapid growth of the e-commerce sector. The existing tax regulations require adjustment to the new economic conditions. The e-commerce package, on the other hand, completes the series of changes in the VAT regulations introduced by the EU in recent years.
The eCommerce package – proposed changes
The main objectives of the EU directive include the standardisation of the VAT settlement processes, including the turnover threshold (EUR 10,000). Having exceeded this limit, preparing a VAT declaration for online trade conducted on the territory of the delivery country will be required.
The EU e-commerce package will enable entrepreneurs to settle VAT with only one declaration in the form of VAT-OSS (One Stop Shop). This way, entrepreneurs selling goods or providing services within EU will not have to register their business in each country individually. They can do it by submitting a single document in the country of identification, i.e. the address of the registered office or the place where the business is registered. VAT will be calculated in accordance with VAT rates applicable in the recipient country.
When should we expect these changes?
The changes in the Polish tax law introduced through the package for e-commerce sellers are to take effect in July 2021. It is worth acquainting oneself with the new procedures beforehand, so as to prepare for the alterations to come.
