Mha Plc · LSE:MHA
Mha — VAT & E-Commerce Webinar (May 2021)
41 slides from Mha's conference presentation, May 2021
Slide 1: EU VAT & E-Commerce Changes - are you ready?
EU VAT & E-Commerce Changes - are you ready? Alison Horner Jonathan Main Andrew Thurston Marisa Hut Partner Partner Customs Duty Consultant Senior Manager VAT & Customs MHA MacIntyre Hudson MHA Moore & Smalley MHA MacIntyre Hudson Baker Tilly
Slide 2: Welcome to our latest webinar
Welcome to our latest webinar which is a follow up to our Brexit series. • Our presenters and what we are going to cover. • The pandemic and growth in on-line sales o UK up 36.6% in 2020 o Global up 27.6% in 2020. o 1st January the perfect storm of Brexit and E-comm changes in UK which had a much lo
Slide 3: 1 January changes
A step by step approach to changes introduced on 1.1.21 1 January changes • Do you supply goods or services? • Do you supply businesses or private consumers? • If you sell goods, are they shipped from the UK or overseas? • What is the value of your supply? • Do you sell via an online marketplace?
Slide 4: Outbound services from the UK
Outbound services from the UK • Up to 31st December, most B2C supplies of services were subject to UK VAT 1 January changes • From 1st January, a number of B2C services to non-UK residents are no longer Do you supply goods or subject to UK VAT services? • These include: o Advertising o Accountancy o
Slide 5: Use and enjoyment
If the following B2C services are “consumed” in the UK, they will be subject to UK 1 January changes VAT even if the customer is not resident here • Hiring goods, including means of transport Use and enjoyment • Broadcasting services Digital services are not subject to UK VAT if they are supplied to
Slide 6: Inbound services to the UK
1 January changes A non-UK supplier of B2C services will need to register for UK VAT in the following circumstances Inbound services to the UK • The supply of digital services to UK resident consumers o If an online marketplace facilitates the supply, it will be required to account for UK VAT on beh
Slide 7: Supplies of goods
• With a few exceptions, which typically relate to the status of the customer and the time taken to export the goods, all B2B and B2C exports of goods from the UK are zero-rated from 1.1.21 1 January changes • For B2B and B2C sales of goods over £135 to the UK Supplies of goods o The UK customer wil
Slide 8: B2C supplies of goods
1 January changes • These changes affect goods valued at £135 or less per consignment • £135 excludes shipment unless these charges are included in the sale price B2C supplies of goods and not itemised separately • There are different rules for goods sold by businesses on their own website or social
Slide 9: B2C supplies of goods
1 January changes • For sales of goods shipped to order: o The sale of goods will not be liable to duty or VAT at import B2C supplies of goods o The non-UK supplier must register for UK VAT • If the goods are shipped to the UK in bulk: o The non-UK supplier will have imported the bulk consignment an
Slide 10: B2C supplies of goods – online marketplaces
1 January changes • If the goods are outside the UK at the point of sale, the online marketplace accounts for VAT at the point of sale on its UK VAT return B2C supplies of goods – online marketplaces • If the goods are in the UK at the point of sale o The non-UK vendor will make a zero-rated supply
Slide 11: Northern Ireland
• Northern Ireland (NI) remains in the EU for trade in goods. Any EU-NI sales will 1 January changes currently be dealt with by the Distance Selling VAT regime Northern Ireland • They will be dealt with by the EU rules to be introduced from 1st July • Any non-EU sales of goods will be dealt with as
Slide 12: Changes to EU Imports
• From 1 July 2021 it will be possible to declare goods up to €150 Changes to EU using a customs declaration that requires 3 times less data than a Imports standard declaration. • There will be a “super-reduced data set” on imports of low-value consignments. • Customs Procedure Code 40 00 C07. • Ful
Slide 13: Customs Representation
• EU customs legislation allows a customs agent to be appointed on either a Direct or Indirect basis. Either the importer or the Customs Customs agents needs to be established in the EU. Representation • This must be agreed before any shipment is arranged. Direct Representation: • The customs repres
Slide 14: Exporting to the EU
UK Export Declaration EU Import Declaration Exporting to the EU • Commercial Invoice Consideration: • Zero-Rate VAT Supply • INCOTERMS • Evidence of Export required • Customs Agent 11/05/2021 © Baker Tilly 14
Slide 15: Common Issues
− Some businesses are coping well and with simple supply chains and the right Customs representation this is achievable. Common Issues − However, life is not that simple and many businesses are experiencing great challenges and problems. − INCOTERMS – Vitally important to understand your agreed deli
Slide 16: Origin of goods
• It is the exporter’s responsibility for confirming the origin of the goods. Origin of goods • If goods have a positive EU Duty Rate then origin will be an important consideration. • Origin is determined using the Rules of Origin listed in ANNEX ORIG-2: PRODUCT SPECIFIC RULES OF ORIGIN of the UK/EU
Slide 17: Origin of goods - Action Required
Action Required Check the European Customs Tariff to confirm the EU Duty rate. Origin of goods 1. 2. Confirm the first 6-digits of the commodity code for the exported goods (e.g. 39.26.90) 3. Check the Rules of Origin − For the UK/EU refer to ANNEX ORIG-2: PRODUCT SPECIFIC RULES OF ORIGIN of the UK/
Slide 18: EU VAT E-Commerce Changes per July 1, 2021
EU VAT E-COMMERCE CHANGES PER JULY 1, 2021 11/05/2021 © Baker Tilly 18
Slide 19: One Stop Shop system for all consumer services
One Stop Shop system for all consumer services 11/05/2021 © Baker Tilly 19
Slide 20: One Stop Shop system for all consumer services
July 1, 2021 For both EU and non-EU established businesses the - Changes for e-commerce One Stop Shop (OSS) will be available for all B2C One Stop Shop system for all consumer services services provided, not only electronic services. Examples: • Admission to events • Hotel accommodation • Car rental
Slide 21: E-commerce from EU warehouse
E-commerce from EU warehouse 11/05/2021 © Baker Tilly 21
Slide 22: B2C sales of goods are called distance sales
B2C sales of goods are called “distance sales” July 1, 2021 - Changes for e-commerce Distance sales are supplies of goods that are dispatched or transported by or on behalf of the supplier (the business selling the goods) to a non- taxable person (a private consumer, not a business) A distance sale
Slide 23: Changes for e-commerce: EU warehouse
July 1, 2021 - Changes for e-commerce E-commerce from EU warehouse Disadvantages once threshold is breached: • Local VAT registration required for supplier EU • Local VAT compliance warehouse obligations for supplier Current rules • Required to issue invoices complying with local < Threshold: invoic
Slide 24: Changes to thresholds
Changes to thresholds: July 1, 2021 - Changes for e-commerce • Abolition of thresholds per EU country! E-commerce from EU warehouse • Supplies are always subject to VAT in the EU country of arrival • One exception for companies established or having a VAT fixed establishment in an EU country. Suppli
Slide 25: Changes for e-commerce: new rules
July 1, 2021 - Changes for e-commerce E-commerce from EU warehouse Per July 1, 2021: • VAT reported and paid via OSS EU warehouse • No invoice obligation for VAT unless issued New rules • € 10,000 threshold for EU established companies / OSS VAT payable in EU country of fixed establishments only arr
Slide 26: Changes regarding the OSS system
Changes re. the OSS system: July 1, 2021 • The OSS system will be extended for all distance sales of - Changes for e-commerce goods within the EU E-commerce from EU warehouse • EU companies: register for OSS in EU country of establishment • Non-EU companies: must register in the EU country in which
Slide 27: Changes regarding the invoice rules
July 1, 2021 Changes re. the invoice rules: - Changes for e-commerce E-commerce from EU warehouse • Companies using the OSS system no longer have to issue invoices to their B2C customers • If VAT invoices are issued when using the OSS system, the invoices have to comply with the invoice rules of the
Slide 28: OSS advantages and disadvantages
July 1, 2021 Advantages Disadvantages - Changes for e-commerce OSS limited to payable VAT – no VAT EU market at your feet recovery E-commerce from EU warehouse Lower costs for being VAT compliant VAT rates of all EU countries must be known VAT registration obligation in EU country of One OSS return
Slide 29: E-commerce from non-EU warehouse
E-commerce from non-EU warehouse 11/05/2021 © Baker Tilly 29
Slide 30: Changes for non-EU warehouse
July 1, 2021 Changes per July 1, 2021 regarding: - Changes for e-commerce E-commerce from NON EU warehouse • € 22 low value exemption abolished • IOSS system for certain B2C sales of goods from outside the EU • Special system for postal operator / courier if IOSS is not used 11/05/2021 © Baker Tilly
Slide 31: IOSS system
IOSS system: July 1, 2021 IOSS system will be available for: - Changes for e-commerce • goods sold to a consumer, E-commerce from NON EU • whereby package is shipped from non-EU to EU, warehouse • the value of the consignment does not exceed € 150, • it does not concern excise goods, • both EU as no
Slide 32: IOSS - fast tracking goods at customs
July 1, 2021 - Changes for e-commerce E-commerce from non-EU warehouse Distance sales of goods (value <= € 150) imported IOSS – Fast tracking goods at customs from non-EU country via import OSS scheme: • Import VAT exempt • VAT due on value sales IOSS • VAT due at the moment the payment has been acc
Slide 33: Fall back scheme for postal operators / couriers
July 1, 2021 • Special fall back scheme for postal operators / couriers - Changes for e-commerce if supplier does not use the IOSS: E-commerce from NON EU warehouse • Import is VAT taxed • Consumer will only receive the goods if VAT is paid • Who imports the goods: supplier or consumer? • Postal ope
Slide 34: IOSS - Fall back scheme
July 1, 2021 - Changes for e-commerce E-commerce from non-EU warehouse Distance sales of goods (value <= € 150) imported from non-EU country via fall IOSS – Fall back scheme back scheme: • Import VAT due • Payment via postal operator / courier IOSS • Limited to customers in import country Postal ope
Slide 35: Regular rules for VAT upon import apply
July 1, 2021 - Changes for e-commerce E-commerce from NON EU warehouse Regular rules for VAT upon import apply if: • Value > € 150 • Value <= € 150 and supplier not registered for IOSS and special fall back scheme for postal operators / couriers not applied 11/05/2021 11/05/2021 © Baker Tilly 35
Slide 36: Platforms
Platforms 11/05/2021 © Baker Tilly 36
Slide 37: Platforms and marketplaces liability
July 1, 2021 If marketplaces or platforms facilitate: - Changes for e-commerce • either B2C sales within the EU by businesses not Platforms established in the EU; and / or • facilitate B2C sales of goods imported into the EU with a value not exceeding € 150, the marketplaces or platforms will be lia
Slide 38: Action required!
Action required! 11/05/2021 © Baker Tilly 38
Slide 39: Summary: What will you have to do?
Summary What will you have to do? What will you have to do? • Analyse your flow of goods; • Determine the VAT consequences; • Determine which scheme you want to use, and whether you can do so; • Register for the scheme(s) as soon as possible; • Adjust your website and underlying systems and make sur
Slide 40: Visit our website
Visit our website: https://www.bakertilly.nl/en/topics/ e-commerce/ 11/05/2021 © Baker Tilly 40
Slide 41: Disclaimer
Disclaimer These slides are for discussion purposes only. The slides may contain errors. Always consult a professional before taking business decisions. No rights can be derived from these slides. 11/05/2021 © Baker Tilly 41