Intra-Community distance selling
Intra-Community distance selling is when a company sends goods from one Member State to private or certain other recipients in another Member State. Intra-Community distance sales must normally be taxed in the Member State that is the final destination of the consignment (country of destination). By way of derogation, intra-Community distance sales by micro-enterprises are taxable in the Member State where carriage begins.
As of 1 July 2021, there will be some major changes to the rules on intra-Community distance sales. For example, the distance selling threshold will be abolished, and intra-Community distance sales will instead be taxable in the country of destination in most cases. Moreover, VAT chargeable within the EU on intra-Community distance sales will in future only be declared and deducted in one EU Member State (Member State of registration) via the EU One Stop Shop. The new rules will apply to sales transactions effected on or after 1 July 2021.
Recipients of distance sales
The rules on distance selling will only be applicable to the supply of goods to the following categories of person:
- business owners who are not purchasing the item for their business
- threshold purchasers who do not exceed the purchase threshold and also do not waive application thereof
The term "threshold purchasers" covers the following businesses:
- businesses that only effect non-taxable transactions and are therefore exempt from input tax
- farmers eligible for flat-rate tax
- legal persons that are not business owners or are not purchasing the item for their business (e.g. chambers of commerce, local government authorities)
There is a simplified rule for micro-enterprises, which stipulates that intra-Community distance sales must be taxed in the Member State in which the carriage of the goods begins. For this rule to apply, the company must only be established in one EU Member State, have no other permanent establishments and effect intra-Community distance selling transactions and services within the meaning of Article 3a, paragraph 5, first sentence of the Umsatzsteuergesetz (UStG - Austrian VAT Act) worth no more than Euro 10,000. This simplification provision can be waived.
The provisions on the purchase threshold and the exemption for micro-enterprises (as well as the distance selling threshold) do not apply to sales of excisable goods. When such goods are delivered to Austria from other Member States, they are always subject to Austrian VAT or result in acquisition tax being incurred by the threshold purchaser.
Until 30 June 2021, if a company supplies goods from one Member State to private or certain other recipients in another Member State, this transaction is only taxable in the destination country if the distance selling threshold for the destination country in question is exceeded. The place of delivery relevant for taxation purposes only changes when the distance selling threshold in the Member State where the delivery or shipment ends is exceeded. Calculation of the distance selling threshold must take place separately for each Member State. Consequently, in the case of intra-Community distance selling to Austria, it is the Austrian distance selling threshold that must be applied.
However, it is also possible to waive application of the distance selling threshold. In the case of distance sales from Austria to the rest of the Community territory, the Austrian tax office (→ BMF)German text must be notified in writing that the waiver is being applied. This waiver can be issued separately for each Member State. This shifts the place of delivery to the country of destination right from the first sale, irrespective of the number of transactions carried out.
The distance selling threshold does not apply to excisable goods.
responsible for content: Federal Ministry of Finance