Intra-Community distance sales of goods and telecommunications, radio broadcasting, television and electronic services

Royal Decree-Law 7/2021, of 27 April, transposing European Union Directives in the areas of competition, anti-money laundering, credit institutions, telecommunications, tax measures, prevention and repair of environmental damage, movement of workers in the provision of transnational services and consumer protection, introduces the following amendments to Law 37/1992, of 28 December, on Value Added Tax:

Article 10 of RD -Law 7/2021 incorporates into our internal legal system the Directive ( EU) 2017/2455 of the Council, of December 5, 2017 and the Directive ( EU) 2019/1995 of the Council of November 21, 2019 which concludes the regulation of the treatment of VATof electronic commerce.

The transposition of the first part of Directive 2017/2455, which entered into force on January 1, 2019 , was incorporated into our internal legal system by Law 6/2018, of July 3, on the General State Budget for the year 2018 and entailed, in relation to the services provided by electronic means, telecommunications and radio and television broadcasting:

The establishment of a common threshold at Community level of up to EUR 10,000 per year which allows that, as long as this amount is not exceeded, services provided by micro-enterprises established in a single Member State will be subject to VATof the Member State of establishment of the provider.
Application of the billing regulations existing in the Member State of identification of the supplier benefiting from the special one-stop shop regimes.
Allow the use of special one-stop shop regimes for entrepreneurs or professionals not established in the Community, but already registered for VATin a Member .
These amendments remain in force and will also apply to transactions to which the one-stop shop applies.

The transposition of the second part of Directive 2017/2455, whose rules are applicable since 1 July 2021 , introduces important changes in the area of taxation of supplies of goods and services which, generally contracted via the internet and other electronic means by Community end consumers, are sent or provided by entrepreneurs or professionals from another Member State or a third country or territory.

These operations are subject to VAT the Member State of arrival of the or the establishment of the recipient.

1) Definition of two new categories of goods (articles 8. Three and 8 bis LIVA ).

Two new categories of supplies of goods are defined:

Intra-Community distance sales of goods: supplies of goods dispatched or transported by the supplier from one Member State to another, the recipients of which act or have the status of final consumers. The goods must not be new means of transport or goods undergoing installation and assembly.
Distance sales of goods imported from third countries or territories : supplies of goods which have been dispatched or transported by the supplier from a third country or territory to recipients who act as or have the status of final consumers established in a Member State. These operations are separate from the recipient's importing of the imported goods. The goods must not be new means of transport or goods undergoing installation and assembly.

2) Elimination of the exemption on imports of low-value goods (article 34 LIVA).

The exemption on imports of low-value goods currently applicable up to a total value of EUR 22 has been removed, meaning that imports of goods that do not benefit from the one-stop shop will have to pay VAT on imports.

3) VAT exemption on imports declared through the single window (article 66. 4 LIVA).

In order to facilitate the application of the special single-window import regime ( IOSS ) and avoid double taxation, an exemption from VAT is established for imports of goods that must be declared under this special regime at the time of import.

The seller, or the intermediary acting on their behalf, must provide Customs with the individual IOSS identification number assigned at the time of filing the Customs import return at the very latest. It only applies to shipments whose intrinsic value does not exceed 150 euros , excluding products subject to special taxes.

4) Place of delivery of goods (articles 68 and 73 LIVA).

Intra-Community distance sales of goods will be taxed in the Member State where the recipient receives the goods .

However, they will be taxed at the place of commencement of transport when these sales are made by entrepreneurs established in a single Member State and their value, together with the services provided by electronic means, telecommunications and radio and television broadcasting carried out in the Community, does not exceed a common threshold at Community level of 10 000 euros. In this case, business owners may choose to apply taxation at the destination. They may also revoke this option.

The supply of goods subject to excise taxes, when the recipients are persons whose intra-Community acquisitions of goods are not subject to excise taxes pursuant to Article 14 VAT Law, shall in any case be taxed at the destination.

distance sales of goods imported from third countries or territories will be taxed in the Member State of arrival of the dispatch or transport when the special import regime of the single window is applied.

5) Place of provision of services (article 70. One.4 and 8, article 73 LIVA).

The common EU-wide threshold of EUR 10,000 applied in the case of business owners established in a single Member State to allow taxation of electronic, telecommunications and radio and television broadcasting services in the Member State of establishment has been extended to include the value of intra-EU distance sales made.

6) Digital interfaces: online platforms, portals and marketplaces (Articles 8a, 20a, 75, 94. One.1.cy 166 bis LIVA).

In order to ensure VAT is collected and reduce the administrative burdens on suppliers, tax authorities and end consumers themselves, it must be understood that business owners or professionals who own a digital interface have received and delivered the goods on their own behalf when they facilitate the following sales:

Distance sales of goods imported from third countries or territories in shipments with an intrinsic value of no more than EUR 150.
Deliveries of goods within the EU by a supplier not established in the EU to end consumers.

This provision has important tax implications:

Those responsible for digital interfaces are considered as taxable persons.
Two deliveries of goods take place: one from the supplier to the owner of the interface and one from the owner of the interface to the end consumer. The accrual of both deliveries occurs when the customer’s payment is accepted.
The transport of goods is linked to the delivery by the owner of the interface to the end consumer.
The delivery of the goods deemed as having been made by the supplier to the owner of the interface is exempt from VAT and does not limit the right for a deduction of input VAT by those performing the delivery.
The owner or person responsible for the digital interface may make use of the special one-stop schemes for the return-settlement of VAT arising on these transactions for which they are considered the taxable person, even in the case of domestic supplies to end consumers in the same Member State in which the goods are stored.

With effect from 1 July 2021, section 11 c) Page 7 bis has been deleted in Form 036 and section A) linked to the reason for filing box 138 of this census form, called “Modification of data relating to special regimes for intra-Community trade (page 7)”, has been modified so that it is possible to opt for taxation outside the territory of application of the Tax on Intra-Community Distance Sales of goods, telecommunications services, broadcasting, TV and electronic means, when the requirements provided for in articles 68 are met. Three a) and b), 68. Five, 68. Four and article 70, section one. Number 4 a) and 8 of the LIVA.