The new rules for e-commerce have brought an important change: If the distance sales are transported from another EU-member state as the state of the seller´s seat, the seller becomes VAT liable in the country of dispatch at the moment of the first delivery. The reason is that the threshold of 10,000 EUR for distance sales does not apply on the situation in which the seller transports the goods from a country other than the country in which it is based.
Many even smaller sellers who use the Amazon warehouse abroad are going to become VAT liable in other EU countries. The new option of using so-called OSS (One – Stop - Shop) makes things easier. Using OSS, sellers can declare their distance sales in the country in which they are based without having to register abroad.
However, the Amazon-sellers should pay attention to the following four transactions :
1) FC transfers
2) Commingling sales
3) Distance sales from the Czech Republic
4) Sales in the Czech Republic
Although the sellers can avoid their registration obligations abroad with OSS, this does not apply if their goods are stored in another EU member state. This happens especially when the sellers participate in Amazon-PAN-EU programs.
EXAMPLE: A German or an Austrian dealer stores his goods i. a. in the Czech Republic, it also carries out so-called goods transfers (FC transfers) in addition to the distance sales. These are declared as intra-community acquisitions in the destination country and as intra-community deliveries in the country of origin.
In any case, these transactions must be declared in the Czech Republic, otherwise there is a risk of taxation - see the quick-fixes rules that have been in force across Europe since September 1st, 2020. Because of this transactions, the VAT registration for Czech value added tax is still necessary even after the e-commerce reform.
Not only FC transfers, but also the so called Commingling Sales must be declared in the local VAT return as domestic deliveries. They represent another reason for which the VAT registration is an obligation for Amazon seller in the Czech Republic.
EXAMPLE: An end consumer (B2C or B2B) from Poland orders goods from the Amazon seller A. The goods are stored in the Czech Amazon warehouse, but the goods from the seller A are currently not available. In the warehouse, however, the goods from the seller B are in stock. Amazon takes the corresponding goods from this inventory of the Amazon seller B and sends them to the buyer on behalf of the Amazon seller A.
The seller B must declare the transaction in the Czech VAT return as a domestic delivery, while the seller A must declare a domestic purchase (OSS is not to be used) .
The dispatch of the goods to B2B (i. e. to another company) is recorded by the seller A in the Czech VAT return as an IC-delivery and at the same time in the recapitulative statement.
The dispatch of the goods B2C (i.e. to an end customers) is either recorded via OSS (if the seller is registered in the OSS) or declared in Poland. In both cases, the dispatch of the goods is also declared in the Czech VAT return.
Many sellers believe that registering for the OSS avoids reporting of their transactions in the Czech Republic. This does not only apply to FC transfers and commingling sales, but also not to the transactions that are declared in OSS in the country of domicile.
The Czech tax authorities require that also all distance sales dispatched from the Czech Republic continue to be declared in the Czech VAT return, apart from the fact that they are not taxable in the Czech Republic. These distance sales are still subject to Intrastat reporting.
The fourth transaction that has to be declared in the Czech Republic and cannot be declared in OSS are the sales within the territory of the Czech Republic. If the goods from the Czech Amazon warehouse are delivered to a Czech customer, the Amazon sellers must report this transaction in their Czech VAT returns and pay the Czech VAT directly to the Czech tax office - OSS does not work in this case because this is not the distance sale in the meaning of the European definition.
The new rules practically mean that
- there is no longer any threshold for distance sales carried out from another country as from the country of seller´s seat,
- the distance sales from the Czech Republic, which were previously taxable in the Czech Republic, are now taxable in the destination country,
- these distance sales can be declared in the country of the seller´s seat by means of OSS and
- the VAT can be paid in the country of the seller´s seat.
All transactions that were declared in the Czech Republic before E-commerce reform must still be reported in the Czech Republic. Therefore the VAT registration for the Czech VAT is still necessary for all Amazon sellers.
Similar obligations as Amazon traders have also another traders using the warehouses of About You, Zalando etc.
Yourtaxes.cz – Your VAT registration in the Czech Republic
Foreign companies are increasingly hiring employees directly in the Czech Republic. We take care of the related obligations regarding payroll tax and social and health insurance.
The Czech Republic introduces an extraordinary windfall tax as of 1 January 2023. The tax will be levied on excess profits for a period of years 2023 - 2025 and it will apply to companies in the sectors of energy production and banking.
VAT refunds are granted to UK persons under similar conditions under which Czech persons may claim the VAT refunds, i. e. the purchases must be used for the economic activity of the applicant.