NEWS & UPDATES

Online market VAT changes in the pipeline for when Britain leaves EU Single Market

May 2020 : The Government has announced a consultation that could significantly impact the VAT accounting treatment for online marketplaces and possibly delivery agents. The issue is part of the alignment of how EU and non-EU goods will be treated after the UK leaves the EU Single Market and Customs Union on 1 January 2021. It is being proposed that for online consumer sales by overseas suppliers via a marketplace (such as Amazon or eBay) the obligation to account for VAT will shift from the supplier to the marketplace.

Where a marketplace is not used but the goods are sold directly to UK consumers from the seller’s own website, the seller will remain responsible for the VAT. However, HMRC is looking at ways in which the delivery agents (such as Royal Mail, DHL, UPS, etc) can police the VAT system and ensure that their overseas customers are registered and accounting for VAT correctly.

Germany

5 June 2020 : The German Government has announced guidance of the temporary VAT rate cut from 19% to 16% from 1 July until the end of 2020. The reduced VAT rate is also to be cut from 7% to 5%. Restaurant, café and other catering services will enjoy a VAT rate cut from 7% to 5% between 1 July 2020 and 30 June 2021.

France : Appointment of a tax representative

10 September 2019 : Since your company is established outside of a European Union Member State, you must appoint a tax representative, who must be a taxable person liable for VAT established in France, and who is known to the tax authorities. You must provide a power of attorney, signed by your company and your representative, which authorises the representative to file claims on your behalf (see the example in form no. 3560 B).

You should be easily able to find the contact details for a tax representative in an online telephone directory.

Your representative must be approved by the VAT refund department.

To obtain this approval, your representative must submit a written request to the department, together with your appointment and his or her acceptance. The representative must:

  • Commit to paying VAT on your behalf in the case where you have received an undue reimbursement.
  • Be impeccably honest in matters of taxation.

The granting or refusal of approval will be notified in written form to your representative. This approval may be withdrawn at any moment if the representative fails to fulfil his or her personal obligations, or if he or she habitually submits refund claims that contain errors, or which run counter to the legislation in force.

EU : The European Commission proposes to delay the 2021 VAT e-commerce package and OSS to July 2021.

The European Commission has proposed that the implementation of the 2021 VAT e-commerce package, which was due to come into force on 1 January 2021, should be delayed until 1 July 2021 in light of the global Covid-19 pandemic. At this time, the European Parliament is yet to agree the new start date. The European Council will then ratify this.

The new VAT measures includes the expansion of the Mini One Stop Shop (MOSS). 

This currently applies to business-to-consumer (B2C) supplies of telecommunications, broadcasting and electronic (TBE) services in the EU. Under the new One Stop Shop (OSS), this will include the distance sale of goods and any other services supplied B2C in the EU. In addition, abolishing Member State distance selling thresholds. Instead replaced with a new €10,000 EU wide threshold.

Also included as part of the package is the abolishment of the €22 VAT exemption for the import of low value consignments: and the introduction of the Import One Stop Shop (IOSS) for non-EU businesses.

EC Sales lists and Intrastat reporting

Intrastat reporting is very similar to EC Sales lists, it is important that businesses complete these accurately as most EU governments will use the data collected to monitor the health of the economy. There are two extra levels of reporting for these goods: The EC Sales Lists (ECSLs) and the Intrastat Supplementary Declarations (SDs).
These are two entirely different systems. Sales of goods to EU VAT registered customers must be declared on an EC sales lists. The EC sales lists is an audit and control mechanism, designed to make sure that the recipient of a good in a member state who has received the good as a zero-rated dispatch performs the two-stage acquisition process.
The Intrastat reporting system is purely for statistical purposes and only records actual movements of goods within the EU. There are two separate legs to the Intrastat system – arrivals (of goods into a member state) and despatches (of goods out of a member state).
Although every VAT registered business is obliged to
declare certain information. Those businesses that exceed the thresholds will
have to file an Intrastat report. These thresholds are £1.2 million for
arrivals and £250,000 for dispatches.

Amazon Prime is now available in Turkey!

Tuesday September 15, 2020, customers residing in Turkey can subscribe to the free and fast shipping programme, which also includes access to free music, video and entertainment.
Prime members will enjoy same-day delivery with their orders of TRY 50 and above in Istanbul, Bursa and Kocaeli, free next day premium deliveries to Istanbul, Ankara, Izmir, Bursa, Kocaeli, Antalya, Manisa, Bolu and 10 other core cities, free two-day premium deliveries to Adana, Mersin, Gaziantep, Osmaniye, Kahramanmaraş, Adıyaman, Şanlıurfa, Diyarbakır and 15 other cities and free standard delivery for the rest of the country. Brands eligible for Prime delivery at launch include favourite brands such as Samsung, Under Armour, Maybelline, LEGO, Philips, Omo, Prima, L’oreal Paris, Puma, Bose, HP, Lenovo and many more.

France Government to outline impacts and benefits of mandatory e-invoicing

Article 153 of the finance law for 2020 provides, the compulsory issuance of invoices between subject to dematerialized VAT and the transmission to the tax administration of the data on these invoices. A report was submitted to Parliament on the conditions for this implementation of these obligations.

The obligation would be put in place as follows:

From 2023, all companies will have to be able to receive an invoice electronic (obligation to receive), where applicable via the public platform made available free of charge by the State: this step is necessary to allow companies to earn quickly the gains expected from electronic invoicing. This will cover domestic B2B invoices initially. France imposed electronic invoicing on B2G transactions starting in 2017 in a phased approach.

Domestic B2C and cross-border sales invoicing transactional data will have to be reported (‘e-reporting’) to the French tax authorities. Gradually between 2023 and 2025 depending on the size of the company, an issue obligation invoices in electronic form, like the progressive obligation put in place for public sector suppliers:

  • January 1, 2023 for large companies,
  • January 1, 2024 for mid-sized companies,
  • January 1, 2025 for SMEs and VSEs.

    FRANCE |NO FISCAL REPRESENTATIVE REQUIREMENT POST-BREXIT

    The French Tax Authority confirmed that UK businesses will not be required to appoint a Fiscal Representative when the UK finally leaves the EU and becomes a third country on January 1, 2021.
    The French tax authorities have confirmed that UK businesses will not have a requirement to engage a fiscal representative when the Brexit transition period ends on 31 December 2020, even if there is no agreement reached between the UK and the EU.
    A fiscal representative is a local entity that represents foreign traders for VAT purposes, usually in countries where the traders must VAT register but cannot do so themselves.

    Time is close for Austria’s VAT registration requirements for Amazon Sellers

    Under the Austria Digital Tax Act 2020, Amazon has an obligation to share identity and transactional data on selling partners making sales to Austrian customers with the Austrian Tax Authority. This identity data includes the selling partners VAT registration number in Austria. Amazon may suspend selling privileges to customers in Austria if this is not provided.

    If you are required to be VAT-registered in Austria, provide your Austrian VAT Registration Number on Seller Central by December 31, 2020, in order to avoid the suspension of their account until they become complaint with Austrian VAT law.

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