What is an Electronic Interface (EI) and what are the new rules?
An Electronic Interface is a marketplace, platform, portal or similar means. An EI includes the following:
- Involvement of taxable persons who facilitate distance sales of goods through the use of an electronic interface
- Sales on platforms made by companies in non-EU countries to EU consumers
- For imports: for consignments of an intrinsic value ≤ EUR 150
- For B2C supplies of goods in EU: for both domestic and cross-border B2C supplies
- Irrelevant whether the electronic interface is established or not in the EU or whether it is registered or not in MOSS
Taxable transaction
- EI shall have deemed to have received and supplied those goods himself
- Creation only for VAT purposes of two supplies:
- (1) One B2B supply between the seller and the EI; and
- (2) One B2C supply from the EI to the final consumer in the EU
- VAT implications for transactions between seller and EI
- Imports: deemed a supply of goods without transport
=> outside the EU VAT scope
- Domestic and intra-EU sales: deemed a supply of goods without transport: 3 options
- Deemed domestic supply for EI
- VAT reclaim under 8thDirective for EI
- VAT reclaim under 13thDirective for EI
- Commercially viable for EIs? (tax burdens)
Chargeable Event
- Chargeable event: when the payment has been accepted
Which types of electronic interfaces?
- Presumptions/deeming conditions for supplies facilitated through EIs
- EI brings customers and sellers together ending in sale via EI
- Actions finalising in a supply of goods are carried out via EI
- EI authorizes charge to the customer or delivery of goods
- EI sets general T&C of supply
- EI provides for seller (at minimum) product listings for sale and order taking
Place of supply for the deeming transactions – issue of transport for VAT purposes:
- Important to allocate the transport, as in a chain transaction only one transaction can be with transport.
- Assumption 1: The B2B transactions should be assumed without transport.
- Assumption 2: The B2C transaction is the one with transport
(Minutes statement: “deeming the dispatch or transport of the goods to be linked to the supply by the EI to the customer where an EI is used to facilitate sales of goods”)
Changes to the EU VAT Directive 2006/112/EC:
New Article 14a(1) – (2021): new provision making electronic interfaces deemed suppliers (imports):
- Where a taxable person facilitates, through the use of an electronic interface
- such as a marketplace, platform, portal or similar means,
- distance sales of goods imported from third territories or third countries in consignments
- of an intrinsic value not exceeding EUR 150,
- that taxable person shall be deemed to have received and supplied those goods himself.
New Article 14a(2) – 2021 (Domestic and Intra EU)
- Where a taxable person facilitates,
- through the use of an electronic interface such as a marketplace, platform, portal or similar means,
- the supply of goods within the Community
- by a taxable person not established within the Community to a non-taxable person,
- the taxable person who facilitates the supply shall be deemed to have received and supplied those goods himself
Similar wording as art. 28
Imports [Article 14a(1)]:
- deemed a supply of goods without transport => place of supply is where goods are located, i.e. outside EU => outside the EU VAT scope
Domestic and Intra-EU sales [Article 14a(2)]:
- deemed a supply of goods without transport => place of supply is in the MS where goods are located => 3 scenarios
- The non-EU seller has the goods in a MS (and normally a VAT number in that MS) and the EI is established in the same MS => Deemed domestic supply.
- The non-EU seller holds goods in MS1 and the EI is in MS2 => place of supply is MS1 where goods are located => electronic interface will incur VAT in MS1 => constant VAT reclaim under 8th Directive.
- The non-EU seller holds goods in a MS and the electronic interface is outside the EU => place of supply is in the MS where goods are located => electronic interface will incur VAT in an EU Member State => constant VAT reclaim under 13th Directive
Impact art. 14(a) – taxable transaction
For imports of low value consignments < 150 EUR
- supplies made by EU and non-EU suppliers
- such supply of goods is facilitated by an EI.
- it is irrelevant for this purpose, whether the EI is established or not established in the EU or whether the EI is registered or not in MOSS
For B2C supplies of goods in the EU:
- Supplies of such goods made by suppliers not established in the EU; a non-EU supplier with an EU VAT number will also be covered by this provision.
- supply of goods is facilitated by an EI.
- It covers both domestic and cross-border B2C supplies
- It is irrelevant for this purpose, whether the EI is established or not established in the EU or whether it is registered or not in MOSS
Presumptions/Deeming conditions for supplies facilitated through EIs
- the electronic interface brings the customers and sellers together ending in a sale via the electronic interface
- the actions finalizing in a supply of goods are carried out via the electronic interface: buyer’s identification, seller’s identification, buying initiation, ordering of goods, payment of goods; delivery information
- the electronic interface authorizes the charge to the customer or the delivery of the goods
- the electronic interface sets the general terms and conditions of the supply
- the electronic interface provides for the seller at minimum: product listings for sale (including goods description and pricing) and order taking. Where in addition, the electronic interface provides to the seller storage and/or fulfilment services or customer relating services or assisting with returns, refunds or exchanges, the deeming conditions cannot be rebutted
Some indicators suggesting that a taxable person takes part in the supply
- Owning or managing the technical platform over which the services are delivered
- Being responsible for the actual delivery;
- Being responsible for collecting payment unless the only involvement of the taxable person is the processing of payment;
- Controlling or exerting influence over the pricing;
- Being the one legally required to issue a VAT invoice, receipt or bill to the end user in respect of the supply;
- Providing customer care or support in relation to queries about or problems with the service itself;
- Exerting control or influence over the presentation and format of the virtual market place (such as app stores or websites) such that the brand and identity of the taxable person are significantly more prominent than those of other persons involved in the supply;
- Having legal obligations or liabilities in relation to the service provided;
- Owning the customer data related to the supply in question;
- Being in a position to credit a sale without the supplier’s permission or prior approval in cases where the supply was not properly received.
See also
- Chapter 1 – Current VAT rules on Distance Sales of Goods (Before July 1, 2021)
- Chapter 2 – Legislative acts for the implementation of the new E-Commerce VAT rules
- Chapter 3 – Services: Improvements to the Mini One Stop Shop in 2019-2021
- Chapter 4 – New art. 33 in the EU VAT Directive 2006/112/EU – Place of Supply Rules for Distance Sales of Goods
- Chapter 5 – Union scheme – Extension of the OSS
- Chapter 6 – Extension of the OSS to distance sales of imported goods (Import scheme)
- Chapter 7 – Special arrangement for declaration and importation if IOSS is not used
