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Overview of VAT changes for e-stores by 2021. How will e-commerce be affected?

From 1 July 2021, among other things, the special rule of an administrative space for the sale of goods abroad will be extended.

If you sell goods as an e-shop to other EU member states, you need to keep track of payments revenue in each country. If the turnover is higher in another country (for example in Slovakia), you will need to register for VAT Submit two notices in two different states.

Therefore, as part of facilitating the execution of VAT duties, a special rule of administrative space is introduced for providers of selected functions. This mode is also known as Mini One Stop Shop (now “MOSS”) from 1.7. Renamed 2021 OSS.

What is a single management point (OSS)?

It is an electronic system Facilitates VAT obligations For persons selling goods or services within EU countries. OSS allows you to electronically register for VAT in one member state for all long distance sales throughout the EU. As an entrepreneur, you can avoid VAT registration in more than one member country.

In the Czech Republic, the tax office for the southern Moravian region is locally competent (tax administrator) for MOSS. This is possible from an administrative point of view Select specific methods What is relevant to its situation and transactions:

  • OSS within the EU,
  • OSS for non-EU companies,
  • OSS for imports into the EU.

The one-store shop rule will allow taxable individuals To accumulate all reporting obligations in a country of the European Union With a unique new tax number for each single administrative (OSS) regime. The tax authorities of the member countries will then redistribute the VAT.

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So this system will protect the Espers from the obligation to register for VAT in many EU countries. At the same time, this rule will provide all services to the end consumer – non-entrepreneurs.

Cancellation of VAT exemption for import of small items from abroad

Get the Espers sharp! Do you buy goods from abroad? Packages coming from China will become more expensive for you. They are now Packages from abroad up to 22 euros Exempt from VAT. However, in December 2017 the Council of Europe approved a new tax package that would result in the repeal of this benefit. Until 1 July 2021, an amendment will come into force, repealing the VAT exemption for small packages from third countries.

Need vendors who use drop shipping Explore in detail its distribution from outside the EU.

Customs and VAT Limitations

Until the end of July 2021, the following rules apply:

  • Exports up to 22 euros – without VAT and without duty.
  • Exports from 22 euros to 150 euros – without VAT and duty.
  • Exports over 150 euros – VAT and customs duty (customs notification required).

However, from July 1, 2021, goods up to Euro 22 are also subject to VAT.

In addition to the abolition of the VAT exemption, the amendment also introduces the need to represent the carrier in customs operations, which will cost up to CZK 200.

Chinese e-shops are flexible to the new introduction of VAT and customs procedures. Customs procedures can be avoided By opening a supply warehouse or store. Chinese e-shops open new warehouses and brick and mortar stores across Europe, eliminating the cost of tariffs.

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Changes in the trade of goods using the electronic interface

An electronic interface operator is a person who provides goods or services using an electronic interface. This is an electronic marketplace, portal or other site. This could be, for example, a service from Uber, delivery of goods from Amazon, or accommodation mediation via the Airbnb platform.

The new rules also apply to online operating system operators. This includes Duty to keep records of all trades that take place on these sites. These should be kept for VAT purposes for 10 years.

New rules have been introduced to determine the place of performance – the purpose of the new rules in e-commerce Reducing tax fraud.

What Brexit brings

In terms of VAT usage, On 1 January 2021 the United Kingdom became the third country. For example, the same policy applies to this country when trading with the United States, China or Russia. The only exception is the trade of goods between EU member states (hence the Czech Republic) and Northern Ireland, where the rules applicable to EU member states continue to apply.

Goods are now shipped from the UK to EU countries Subject to customs supervision And can be Subject to customs restrictions 952/2013 of the European Parliament and 9 October 2013 Regulation of the Council (EU) Establishment of the Union Customs Code.

In contrast, to import goods from the EU into the United Kingdom, the British government Postpones administrative obligations for products of animal origin from the EU Within six months until October 1, 2021. Until January 1, 2022, it also postpones body customs restrictions on borders (upon entering the UK). For other items, the postponement of customs declaration documents has been extended to January 1, 2022. The reason is the attempt to avoid burdening companies with additional management during epidemics, but the lack of physical infrastructure for border controls.

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Kristana Sebekova, Zápecová Finance sro