Internet portal in the light of e-commerce VAT
Due to the introduction of a wide range of changes to VAT under the so-called e-commerce package revolutionized the rules of taxation of internet commerce. The introduced changes also included internet portals that facilitate the sale of goods. In the article below, we will take a closer look at the new obligations imposed on the website.
Internet portal as a new type of taxpayer
It comes as no surprise that the vast majority of online transactions take place via web portals (electronic platforms / interfaces). Often, entrepreneurs running such portals are not based in the EU, which significantly impeded the collection of VAT.
To prevent the above-mentioned problems, new VAT obligations have been imposed on internet portals.
The above boils down primarily to the introduction of a legal fiction resulting in the transfer of liability for VAT obligations for certain supplies to consumers (B2C relationship) to taxpayers conducting business activities related to the management of electronic interfaces (internet portals).
According to Art. 7a paragraph. 1-2 of the VAT Act, where the taxpayer facilitates, through the use of an electronic interface, such as a platform, trading platform, portal or similar means, hereinafter referred to as "electronic interface", the distance sale of imported goods in shipments with a real value not exceeding PLN an amount corresponding to the equivalent of EUR 150, the taxpayer is deemed to have received the goods and delivered them himself.
If the taxpayer facilitates, through the use of an electronic interface, the performance in the territory of the European Union by the taxpayer who does not have a registered office or a permanent place of business in the territory of the European Union:
intra-Community distance sales of goods or
supply of goods to a non-taxable entity
- the taxable person who facilitates the delivery is deemed to have received the goods and delivered them himself.
In the light of Art. 7a of the VAT Act, a legal fiction is adopted, according to which the platform first purchases goods from the seller (as part of a B2B transaction) and then sells the goods to the final consumer (as part of a B2C transaction). As a result of adopting a legal fiction, the transaction between the seller and the consumer is not settled.
Principles of tax settlement through the internet portal
According to Art. 22 sec. 3a of the VAT Act in the case of supplies of goods referred to in art. 7a paragraph. 1 and 2, the dispatch or transport of these goods is assigned to the delivery of the goods by the taxable person who facilitates the delivery of the goods.
The taxpayer facilitating the delivery is the aforementioned internet portal.
The above therefore means that the B2C delivery between the web portal and the consumer is a mobile delivery. On the other hand, a B2B transaction between the supplier and the platform adopted under the legal fiction will be considered a stationary supply, which is taxed in the country where the goods are located at the time when the shipment or transport of the goods to the buyer begins.
The adopted legal fiction makes us distinguish both a fixed transaction (between a seller and an internet portal) and a mobile one (between an internet portal and a consumer).
When does an internet portal facilitate distance selling?
A web portal becomes a taxpayer in the supply chain when it facilitates distance selling. According to Art. 7a paragraph. 3 of the VAT Act, facilitating is understood as facilitating within the meaning of Art. 5b of Regulation 282/2011.
According to that provision, the term "facilitates" means the use of an electronic interface to enable contact between the buyer and the supplier who offers the goods for sale via the electronic interface, with the result that they are delivered via that electronic interface.
However, a taxable person shall not facilitate the delivery of goods if all of the following conditions are met:
that taxable person does not lay down, directly or indirectly, any conditions under which the supply of goods is made;
that taxpayer is not involved, directly or indirectly, in approving the burden on the buyer in relation to the payment made;
that taxpayer is not involved, directly or indirectly, in the process of ordering or delivering the goods.
In addition, in the case of ESPO and domestic delivery via web portals, in order for this portal to become a VAT payer, the following conditions must be met:
the supplier does not have a base of establishment or a permanent place of business in the territory of the EU (including Poland);
making a base delivery to an entity that is not, in principle, a VAT payer (in the case of the ESPO, the buyer of goods may in some cases be an entity with the status of a VAT taxpayer);
the basic delivery takes place within the EU (the goods concerned have previously been released for free circulation in the EU).
Not every internet portal automatically becomes a taxpayer obliged to settle VAT as part of e-commerce transactions. In this regard, certain conditions must be met, which are generally based on facilitating distance selling.
Obligation to keep relevant records by the website
In connection with the above-mentioned obligations imposed on taxpayers operating internet portals registration obligations.
According to Art. 109b of the VAT Act, the records are kept in a way that allows checking the correctness of the tax or value added tax settlement in relation to each product being the subject of a delivery or each provided service generating a tax obligation.
The taxpayer (internet portal) is obliged to provide electronically, to the extent indicated in the request of the competent tax authority, the records no later than within 14 days from the date of delivery of the request, with regard to:
deliveries of goods where dispatch or transport begins or ends within the territory of the country;
the provision of services, where the place of performance is located in the territory of the country.
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The records should include:
the name, postal address and e-mail address or website of the supplier or service provider whose supply of goods or services is facilitated by the use of an electronic interface;
VAT identification number or national tax identification number of the supplier or service provider (if available);
bank account number or virtual account number of the supplier or service provider (if available);
description of the goods, their value, the place where shipment or transport of the goods is completed, including the date of delivery and, if available, the order number or unique transaction number;
description of the services, their value, information enabling the location and date of their provision to be identified and, if available, the order number or a unique transaction number.
Moving on to the summary, we can indicate that the website, in certain circumstances, becomes an entity obliged to settle VAT due to the adopted legal fiction. In addition, in such a case, they will have certain registration obligations.