As of 1 July 2021, a package of ground-breaking changes to the rules on VAT taxation of electronic commerce (e-commerce) is coming into force.
The changes to be implemented are related to activities aimed at tightening the European VAT system. In recent years, the European Union has adopted a number of changes to EU regulations, including ones aimed at combating VAT fraud in the area of e-commerce, equalizing the situation of EU entrepreneurs with third-country entities, a more complete reflection of the principle of taxation of goods/services at the place of their consumption and reducing the administrative burden related to tax obligations for entities operating in the e-commerce industry. These changes are to take effect from the beginning of the second half of the year.
The planned modifications will have very far-reaching effects and will require appropriate preparation from almost all entities operating in the e-commerce industry. Moreover, these key changes will affect not only e-commerce entrepreneurs, but may also affect the activities of all entities providing cross-border services.