VAT Amendment Concerning e-Commerce Comes into Effect

In June 2021, in our News No. 6 we informed you that the Chamber of Deputies had approved an amendment to the VAT Act.

The amendment should have been effective from 1 July 2021, as required by the relevant European directive.

However, the legislative process then hit a problem. The amendment was published in the Collection of Laws on 30 September 2021 and came into effect from 1 October 2021.

For the transitory period from 1 July to 30 September 2021 taxpayers could make use of the directive’s direct effect and apply the rules defined in the European legislation.

According to our information, this option was used by the vast majority of taxpayers. The main reason is the fact that in other EU countries the relevant rules were amended from 1 July 2021 and it was not possible to continue to apply the original procedures.

Now, however, the Czech VAT Act is in compliance with the relevant European directive.

We would like to remind you of the main changes concerning these areas:

Remote Sale of Goods (formerly sending goods)

The original limit for delivering goods to final customers in other EU countries through an e-shop was EUR 35,000 or EUR 100,000 and was counted separately for each country. Now there is a sole limit of EUR 10,000 per year for all EU Member States together. The limit for the duty to register for VAT in other EU countries will therefore be exceeded very soon (but see below).

Expansion of One-Stop-Shop Concept

However, the European directive and the amendment to the VAT Act allow expanded use of the One-Stop-Shop (OSS) concept. If an e-shop registers with the OSS in the Czech Republic, it will pay VAT on all consignments to other EU countries in the Czech Republic in the form of a special VAT return and will also not have to register for VAT in any other EU Member State. This option can be utilised also for the import of consignments up to a value of EUR 150.

Cancellation of exemption from VAT for goods imports of low value

In the case of the import of consignments up to EUR 22 the exemption from VAT is cancelled. They are now subject to VAT.

If you are affected by the aforementioned changes, please do not hesitate to contact us.

Your WTS Alfery team