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How are EU VAT changes going to affect e-commerce?


On 1 July 2021 changes to EU VAT were implemented. They remain applicable both in Poland and throughout the European Union. Experts claim that they will contribute to increased competitiveness of e-stores operating in EU in relation to entities from third countries. See details of the aforesaid changes and their influence.

Changes to EU VAT – causes of implementation.

E-commerce market has been developing fast around the world, including Europe and Poland. The Internet imposes no limits so many players from other parts of the world, China for instance, have entered the common market. Unfortunately the regulations which have recently ceased to apply provided them with more opportunities when compared to European e-stores. That was the case due to VAT exemption from importing small parcels valued up to 22 EUR. Thanks to such a solution, inexpensive shops from the Far East could provide European customers with more attractive prices.
The law had to be changed in order to balance competitiveness for the European, incl. Polish, e-commerce in B2C sector. The amendment to regulations, also approved by Poland, became effective on 1 July 2021.

What does VAT e-commerce package change?

As a result of the amendment to tax regulations applicable in the European Union, the following modifications have been implemented:

  • elimination of VAT exemption from importing the so-called small parcels whose value cannot exceed 22 EUR,
  • obligation of online marketplaces and platforms which allow purchasing goods imported from non-EU countries with a value less than 150 EUR and their deliveries to consumers to collect and pay VAT,
  • introduction of One Stop Shop procedure (single contact point), which simplifies VAT settlement for transactions made in many EU member states.

This means that an e-store may file only one VAT declaration – in the identification member state.
In effect, for stores operating in the EU, VAT settlement will be simpler. – In effect also Polish e-commerce store owners will find it easier to expand their business to the entire European Union. Their responsibilities and costs related to fulfilling tax-related duties will be reduced. – says OEX E-business expert.

How are EU VAT changes for e-commerce going to translate into operation of Polish online shops?

The above-stated changes will primarily influence B2C sector, related to sale of relatively inexpensive products to individual clients. As a result, as part of international sale in the EU, it will not be necessary to issue VAT declarations after exceeding the specific threshold in the country of consumption – only one VAT declaration filed in Poland will be sufficient. And this will translate into substantially easier expansion of sales into the entire Union.
This means a considerable opportunity for numerous Polish e-commerce stores which so far have decided to limit sales to the domestic market due to complicated procedures. Besides new legislation may force stores to change their head office. We can observe interest of many e-commerce businesses in transferring part of their operations to Poland. Nowadays such operations are relatively easy as long as you find a partner which can provide assistance in the field of logistics, fiscalization and factoring.
There will be time to assess what kind of long-term effects EU VAT package for e-commerce has, yet now entrepreneurs from this market sector look into the future with hope. Simplified regulations substantially increase business growth potential in the world of the Internet, which is great news bearing in mind the current economic situation.

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