As of July 1st, 2021, traders making online sales in the European Union (EU) shall register for VAT electronically. The new regime will allow online sellers to declare and pay VAT due on all supplies of goods and services in a single electronic quarterly return for all sales of goods and B2C services provided within the EU.
How are online sellers and e-trade interfaces affected?
E-sellers will have to apply the VAT rate of the Member State where the goods are dispatched to or where the services are supplied.
- Below a threshold of EUR 10 000 VAT can be paid to the Member State where the selling business is located.
- Above this threshold, businesses will be able to easily register in a One-Stop Shop (OSS) – where they can easily declare and pay the VAT due in other Member States.
The new amendments provide for three special one-stop shop/OSS schemes for VAT declarations and registration:
Union Scheme
Personal Scope:
- EU-based sellers, for supplies of goods and services for which the recipients are final customers/consumers (B2C) and which have a place of performance in a Member State other than that of the trader;
- Non-EU based sellers for distance sales of goods to be dispatched in the EU;
- EU and non-EU based electronic interfaces.
Online sellers and operators of electronic interfaces should:
- register for VAT electronically in a single Member State for distance sales of goods to customers/consumers (B2C) in the EU;
- account for, declare and pay the VAT due by submission of an electronic quarterly VAT return;
- work with the tax administration of their own Member State and in their own language, even if their sales are cross-border.
Non-Union Scheme
Personal Scope: non-EU based service providers.
Applicable to: supplies of services where the recipients are customers/consumers (B2C) and the services are provided in the EU.
Examples (non-exhaustive list):
- accommodation services carried out by non-established taxable persons;
- admission to cultural, artistic, sporting, scientific, educational, entertainment or similar events; such as fairs and exhibitions;
- transport services;
- services of valuation and work on movable tangible property;
- ancillary transport activities such as loading, unloading, handling or similar activities;
- services connected to immovable property;
- hiring of means of transport;
- supply of restaurant and catering services for consumption on board ships, aircraft or trains etc.
Import Scheme
Persons concerned:
- sellers based in Bulgaria, including by permanent establishment (in cases where the seller does not have its registered seat and headquarters’ address in the EU), for distance sales of goods imported from third countries to be dispatched in the EU;
- non-EU based sellers for distance sales of goods imported from third countries to be dispatched in the EU;
- EU and non-EU based electronic interfaces for online sales of goods imported from third countries to be dispatched in the EU.
Applicable where the goods are:
- dispatched or transported from outside of the EU;
- dispatched or transported in consignments with a value not exceeding EUR 150 (low value goods), even if the order contains more than one item;
- not subject to excise duties (typically applied to alcohol or tobacco products).
Specifics:
- The “Import” scheme cannot be applied if low value goods are bought and/or dispatched along with excise goods, whether or not the value of the consignment exceeds EUR 150.
- As of July 1st, 2021, import of small consignments amounting up to EUR 22 will no longer be a VAT exempt supply.
How do these changes affect consumers?
The EU-wide harmonisation of VAT registration also relieves online consumers
from facing with “hidden” costs. The most significant effect of the amendments over consumers is that the VAT rate applied for online shopping from the EU and from third countries will be the same as the VAT rate in the consumer’s country of origin.
Thus, a Bulgarian consumer, buying goods from all over the world, will always pay VAT at the rate of 20 % in accordance with the Bulgarian VAT law.
