New taxation system for remote selling and extension of the one-stop shop
Article 10 of Royal Decree-Law 7/2021 of 27 April on the transposition of European Union directives on competition, anti-money laundering, credit institutions, telecommunications, tax measures, prevention and repair of environmental damage, posting of workers in the provision of transnational services and consumer protection, amends Law 37/1992 of 28 December on Value Added Tax incorporating the amendments arising from the transposition of Council Directive (EU) 2017/2455 of 5 December 2017 amending Directive 2006/112/EC and Directive 2009/132/EC as regards certain Value Added Tax obligations for the supply of services and distance sales of goods, with the exception of Article 1 thereof, which was transposed into law by Law 6/2018, of 3 July, on the General State Budgets for 2018 and Directive (EU) 2019/1995 of the Council of 21 November 2019, amending Directive 2006/112/EC as regards the provisions relating to the distance sale of goods and certain domestic energy deliveries.
Furthermore, and completing the transposition of the above directives, Royal Decree 424/2021, of 15 June, amending the Value Added Tax Regulation was approved by Royal Decree 1624/1992, of 29 December; the ‘Regulation governing invoicing obligations’, approved by Royal Decree 1619/2012, of 30 November; the ‘General Regulation on tax management and inspection actions and procedures and implementing common rules for tax application procedures’, approved by Royal Decree 1065/2007, of 27 July.
The transposition of these directives, the rules of which apply from 1 July 2021, has resulted in important changes in the field of taxation on supplies of goods that, purchased by final consumers, generally online and via digital platforms, are sent by the supplier from another Member State or a third country or territory, and on supplies of services rendered to final consumers by business people not established in the Member State where, pursuant to the rules on the location of the taxable event, they are subject to value added tax.
On the other hand, in order to reduce administrative burdens and facilitate the collection of the tax, three new special one-stop schemes are introduced in Chapter XI of Title IX of Law 37/1992 of 28 December 1992, to which entrepreneurs and professionals, generally not established in the Member State to which the transactions are subject, may optionally apply for the declaration and settlement of the value added tax due on supplies of goods and services to final consumers established in the Community.
The main changes introduced by the Royal Decree-Law and Royal Decree with effect from 1 July 2021 are as follows:
The modification of the EU distance selling regime through the creation of a new category of supply of goods:intra-Community distance sales. The new system involves taxation at the destination of intra-Community sales to private individuals, except those made by micro-enterprises established in a single Member State that undertake intra-Community sales to private individuals in other Member States on an occasional basis, which shall be taxed in the original Member State up to the limit of 10,000 euros (excluding VAT) and in the end Member State once this limit has been surpassed, with the possibility of opting for taxation at the destination even when the limit has not been surpassed.
The implementation of a special scheme similar in nature to the Community distance selling scheme for sales of goods imported from third countries or territories, which incorporates an exemption on the importation of those goods for which the taxable person avails himself of the new import scheme that is created.
The exemption from VAT on imports for low-value goods is eliminated.
The involvement of digital platforms in the collection of VAT due on certain distance sales of imported goods and sales located within the Community. To this end, the necessary amendments are introduced to consider them as taxable persons in certain transactions in which they are involved and in which they are deemed to receive the goods from the supplier and deliver them to the final consumer.In order to avoid double taxation, the supply from the supplier to the platform will be exempt and eligible for deduction.
The standardisation of the limit used to determine taxation at the destination for intra-Community remote sales and telecommunications, radio or television broadcasting and electronically supplied services carried out or provided by micro-enterprises established in a single Member State.
The above amendments are complemented by the extension, with effect from 1 July 2021, of the one-stop-shop regimes, by replacing the special regimes applicable to telecommunications, radio and television broadcasting and electronically supplied services by the following:
The non-EU system, applicable to services provided by business people or employers not established in the Community to recipients who are not business people or employers acting as such.
The EU system, applicable to services supplied by business people or employers established in the Community, but not in the Member State of consumption, to recipients who are not business people or employers acting as such, to intra-Community remote sales of goods and to domestic supplies of goods carried out under the conditions provided for in Article 8(a)(b) of the VAT Law.
The import system, applicable to distance sales of goods imported from third countries or territories.
As a result of these changes, the "Mini One-Stop Shop" has been renamed the "One-Stop Shop" (OSS) and the "Import One-Stop Shop" (IOSS) has been created, with the following transactions included in the One-Stop Shop from 1 July 2021, in addition to telecommunications, radio or television broadcasting services and services provided electronically to final consumers:
Intra-Community distance sales of goods.
Distance sales of imported goods.
All services supplied to final consumers by traders or professionals not established in the Community.
All services provided to end consumers by businesses or professionals established in the Community but not in the Member State of consumption.
Supplies of goods located within the Community where the taxable person is an electronic interface within the meaning of 8.bis(b) of the VAT Act.
The new systems are rounded off by the introduction of a special method for the tax return and payment of imports made by business people or employers who, fulfilling certain requirements and having the right to benefit from the import scheme, do not make use of it.