Amendment to the VAT Act: changes in e-commerce

At first reading, the Chamber of Deputies proposed for further consideration an amendment to the VAT Act that, effective from 1 July 2021, should entirely change (among other things) the rules for mail order trade in goods within the EU. Even though the expected effective date of the amendment is approaching, it is still possible that it will be adopted in a timely manner.

Decision on VAT exemption for respirators

With her new decision, the Minister of Finance extended the possibility of supplying respirators (especially FFP2 type) exclusive of VAT until 3 June 2021. The measure was originally due to end after 3 April 2021.

Decision on the remission of fines and penalties

VAT payers who submit a VAT return for the February 2021 taxation period late or who pay the tax late may expect the relevant penalties to be remitted. The condition is to meet the relevant obligations by 12 April 2021.

Judgements of the CJEU

• In case C‑802/19 (Firma Z), the Court of Justice assessed the VAT treatment of an indirect bonus granted by the producer who had originally sold the goods to its customer as intra-Community VAT exempt. According to the Court, the tax base cannot be reduced for this original supply. We have also held this view for a long time, but we have also encountered other approaches in practice, which now turned out to be wrong.
• Furthermore, the CJEU issued a decision in case C-812/19 Danske Bank concerning the provision of a service by the head office to a branch in another Member State. The specificity was that the head office was a member of the VAT group. According to the Court, the service is subject to tax in this case. In our opinion, this is not a surprising decision; it should not have a significant impact in practice.