The new VAT regulations will eliminate unfair competition in e-commerce

From Thursday, July 1, new EU rules for taxing online transactions with VAT apply. The provisions included in the e-commerce VAT package will prevent the inflow of VAT-free parcels to EU countries, e.g. from China, which will level the chances of European and non-EU e-shops and eliminate unfair competition. The new rules also introduce a number of settlements facilitations, thanks to which cross-border e-commerce in the EU may become more popular.

EU solutions are implemented in the Polish legal system by the new act on tax on goods and services of May 20 this year. The purpose of the regulation is to seal VAT in the import of the so-called small shipments from outside Europe. Until now, parcels with a value of up to 22 euros were exempt from this tax, creating an area for abuse. The European Commission has estimated the losses of European economies due to deliberate undervaluation of shipments at EUR 7 billion per year. As of July 1, this solution was abolished.

It is very important for us, because it will give equal opportunities to all entrepreneurs – says Tadeusz Kościński, minister of finance, funds and regional policy. – Until now, entrepreneurs who produce and sell via the Internet in Poland were subject to VAT, and when someone imported, for example, from China, this tax was not there anymore. This is unfair competition. Now the tax will be automatically collected. This is tax justice, important to everyone.

On the other hand, the purpose of the directive, the implementation of which is provided by the Act, is also to facilitate cross-border trade on the EU internal market by simplifying formalities. For example, it will no longer be necessary to register companies in a Member State to which goods are delivered above one common 10 000 threshold. euro.

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