We would like to inform you about the amendment to the VAT Act which entered into force on 1 October 2021. This amendment represents a significant change in the application of VAT in cross-border electronic commerce for final consumers (so-called e-commerce).
According to the previous VAT rules, entrepreneurs generally had to apply VAT to cross-border distance sale of goods for EU final consumers in accordance with the rules of individual EU Member States. For this reason, they usually had to register for VAT in individual EU Member States and then to pay VAT to the local tax authorities.
Nevertheless, this amendment introduced a single threshold of EUR 10,000 per calendar year for determining the place of supply for cross-border e-commerce for final consumers. This value includes not only distance sale of goods, but also the provision of selected services (electronically provided services, telecommunications services, television broadcasting).
Furthermore, the amendment implemented the extension of the One Stop Shop regime (“OSS”). Businesses registered under the OSS regime who supply goods to final consumers no longer have to register for VAT in each EU Member State to which they supply goods. It is now possible to pay the relevant VAT via the Electronic portal of the Tax Authority.
For more information please contact Filip Oudes at filip.oudes@tpa-group.cz