In this legal bulletin, we would like to address the amendment to the Value Added Tax Act, which will have an impact, inter alia, on online shops that sell their goods to other European Union countries. In the bulletin of December 2014, we addressed the amendment to the Value Added Tax Act (Act No. 235/2004 Coll., as amended), which consisted of a change in the method of taxation of the provision of electronically supplied services to Member States of the European Union to persons not liable to value added tax. The aforementioned amendment introduced the so-called Mini One Stop Shop, which was created for the purpose of enabling the provider of electronically supplied services to avoid the lengthy obligation to register for value added tax in each individual Member State and to avoid having to separately file a tax return and remit tax in each Member State of the European Union.

The Chamber of Deputies is currently considering a further amendment to the Value Added Tax Act (parliamentary document 867/0), which should extend the Mini One Stop Shop to a One Stop Shop, which will transpose Council Directive (EU) 2019/1995 of 21 November 2019 amending Directive 2006/112/EC as regards provisions relating to distance sales of goods and certain domestic supplies of goods into national law. Although this amendment has not yet been approved at this time, the Financial Administration expects that this will occur in the coming days and that the amendment will enter into force on 01.07.2021. The Financial Administration has therefore already launched registration for the so-called One Stop Shop as of 01.04.2021.

Thanks to the extension of the existing Mini One Stop Shop that this amendment brings, it will be possible to remit value added tax belonging to another Member State through the domestic tax administrator, without the need to register for value added tax in another Member State for the following transactions:

1. cross-border distance sales of goods between Member States of the European Union (formerly consignment sales of goods);
2. provision of a service by a provider in the European Union to a person not liable to tax (final consumer) in the European Union;
3. supply of goods facilitated by an operator of an electronic interface (digital platform) within one Member State of the European Union;
4. distance sales of imported goods up to EUR 150 from a third country directly to a final consumer in the European Union;
5. provision of a service by a provider outside the EU to a person not liable to tax (final consumer) in the European Union.

For Czech online shops or service providers, points 1) to 3) above could be of particular interest.

The use of the One Stop Shop special scheme will not be mandatory and entities will continue to be able to use the original regime of registration in individual European Union countries. However, the use of the One Stop Shop should facilitate the remittance of value added tax.

The tax administrator for the One Stop Shop special scheme will be the Tax Office for the South Moravian Region, Territorial Workplace for Brno I. Applications to the system will be filed with this tax office, value added tax returns will be submitted there and tax arising from this scheme will be paid there.

In conclusion, it must be stated that the amendment to the Value Added Tax Act will also bring other substantial changes, although its final wording is not yet known at this time. Most probably, however, there will also be changes to the rules on when it will be necessary to register for value added tax in another Member State of the European Union if a trader supplies goods or services there.

Ondřej Bahník, advocate

Law Firm Mašek, Kočí, Aujezdský

This text was originally prepared by the law firm Mašek, Kočí, Aujezdský in cooperation with the Association for Electronic Commerce (APEK) as legal bulletin No. 04/2021 intended for members of this association.

This text was translated from Czech to English using an AI translator.