On July 1, 2021, an e-commerce package in VAT came into force, simplifying VAT settlements across the European Union (EU).
The implementation of the package resulted in simplification of VAT rules not only in business to customer (B2C) transactions, but also in terms of VAT reporting by getting rid of excessive administrative burdens related to a VAT registration in the various EU Member States, or e.g., unification of amount thresholds, invoicing rules.
The areas which were also included in the e-commerce package are cash registers and the obligation to report sales made on them to natural persons not conducting the economic activity and lump-sum farmers.
Registration obligations and cash registers
It is worth reminding that the obligation to keep records of sales with the use of cash registers applies to taxpayers who sell to natural persons not conducting business activity and to lump-sum farmers.
Terminology “sale” is understood as a supply of goods and provision of services against payment within the territory of the country, export of goods, and intra-Community supply of goods. This means that:
- if the place of taxation for intra-Community distance sales of goods (ICDS) is the territory of another EU Member State, such supplies will not fall under the concept of sale. Taxpayers who, as from July 1, 2021, will conduct, the place of taxation of which will be the territory of another EU Member State, will not be subject to the obligation to keep records of sales using cash registers,
- however, if the place of taxation of ICDS (place of supply of goods) is the territory of Poland, then such supplies are generally subject to the obligation to keep records of sales using a cash register, with exceptions, as the VAT regulations provide for several exemptions from this obligation:
● ➥ transactions settled via OSS, whose place of taxation is the territory of Poland (e.g. WSTO from Germany to Poland) are exempt from the obligation to record sales using cash registers;
Exemption from the obligation to record sales using cash registers applies to the entire supply of goods or services which are the subject of sales settled using the OSS procedure
● ➥ deliveries of goods in the mail-order system (by post or courier) are exempt from the obligation to record sales using cash registers if the supplier of the goods receives payment for the performed activity in full by post, bank, or cooperative savings and credit union (respectively, to the taxpayer’s bank account or to the taxpayer’s account in the cooperative savings and credit union of which he is a member), and the records and evidence documenting the payment unambiguously show the specific activity to which it related and for whose benefit it was made (purchaser’s data, including his address).
The above exemptions are temporary and are currently applicable until 31 December 2021.
In our view, a situation where a taxpayer (domestic/foreign) choosing one of the simplified procedures, e.g. EU-OSS, makes in other stream of supply, a supply of goods or provision of services also in the territory of Poland to the Polish consumers, i.e. supply of goods located in Poland to the Polish consumers – the goods do not leave the territory of Poland, should be a subject to detailed analysis. Such or similar situations may require installing and record sales on a cash register by the supplier and other obligations for VAT purposes.
Therefore, not all supplies of goods and services, having chosen one of the simplified procedures within the e-commerce package, will be subject to mandatory exemption from the obligation to keep records with the use of cash registers.
If you have any questions regarding this or other VAT topics, please contact our tax experts: