Impact of the new distance sale rules on Intrastat

 From 1 July 2021, there will be a change in the rules concerning mail order sales, which will be referred to as distance sale of goods from that date. At present, each Member State has a set limit for mail order trade on the import side (in the Czech Republic it is CZK 1,140,000). If the Member State limit is exceeded, the company is obliged to register for VAT in the relevant country.

From 1 July 2021, the limits for distance sale in individual Member States will be abolished and a uniform EU limit of EUR 10,000 will be introduced, which applies for a calendar year in total for distance sale to all EU member states. After exceeding this limit, the obligation to register for VAT in the Member State (s) to which the goods are sent arises, if the PSI does not use the regime of one-stop-shop (so-called OSS). The limit does not start to count until 1 July 2021, but also applies retroactively to the whole of 2020 and the first half of 2021. Thus, if the company exceeded the threshold of EUR 10,000 in the last year or during the first half of this year, it is obliged to follow the new sales rules goods at a distance.

If the PSI uses the one-stop-shop regime, it will not have to register for VAT in the individual EU Member States where it sends goods from a distance sale, but identifies itself with this regime in one Member State, where it declares goods from distance sold to individual Member States.

If a PSI also has VAT registrations in other Member States and uses a one-stop-shop, those registrations will not automatically expire in other Member States. It can cancel them itself, in certain cases they can be canceled ex officio - these tax details must be consulted with tax or accounting advisor.

Specific impact on Intrastat:

• If the PSI sells goods at a distance to final customers in another Member State in which it is not registered for VAT, it reports in Intrastat the dispatch of the goods under transaction code 19.
• If PSI sells goods at a distance to end customers in another Member State in which it is registered for VAT, it reports in Intrastat the dispatch of goods under transaction code 92 (if it would cancel or be ex officio canceled for VAT registration in another Member State due to the use of one-stop-shop and thus has not been registered for VAT in the Member State where the goods are sent at a distance, it will report in Intrastat the dispatch of the goods under transaction code 19).
• If in connection with the use of one-stop-shop, PSI cancels the registration for VAT in CZ, the obligation to declare Intrastat ends in the month when its CZ VAT number was canceled.

Examples:

1) PSI, which is registered in CZ for VAT, sells goods at a distance to end customers in Germany, where it is not registered for VAT. 1. 7. 2021 exceeds the limit for distance sale of 10,000 EUR, does not use the regime of one-stop-shop and registers for VAT in DE. In Intrastat, it will report the dispatch of goods to DE under transaction code 92.

2) PSI, which is registered in CZ for VAT, sells goods at a distance to end customers in Germany, where it is not registered for VAT. 1. 7. 2021 exceeds the limit for distance sale of 10,000 EUR, uses the possibility to declare goods for VAT in the regime of one-stop-shop in the Czech Republic and does not register for VAT in DE. In Intrastat, it will report the dispatch of goods to DE under transaction code 19.

3) PSI, which is registered for VAT in DE and at the same time has VAT registration in CZ and sells goods at a distance from Germany to end customers in CZ, exceeds on 1 July 2021 the limit for distance sale of 10,000 EUR and uses the regime of one-stop-shop in DE. If it cancels VAT registration in CZ, the obligation to declare Intrastat in CZ will end at the moment when its registration was cancelled (the last statement she submits will be for the month in which VAT registration in CZ was canceled).