Service-Tax

IE operator - as an entity facilitating the delivery of goods

The IE operator is a relatively new type of entity that can be considered to facilitate the delivery of goods from the relevant seller.

Its identification was aimed at ensuring the collection of VAT at the operator's level, which will reduce the administrative burden for sellers, tax administrations and consumers, who will know the total purchase price of the goods, including VAT, at the time of ordering the goods.

Therefore, IE operators recognized as entities facilitating the sale of goods at a distance via the electronic interface will be obliged to settle VAT on these transactions as if they had received and sold the goods themselves.

A key question arises - when will the IE operator be considered an entity facilitating the delivery of goods, and therefore obliged to settle and pay VAT?

Legal framework for changes relating to distance sales of goods

Legal provisions introducing modifications to the existing international transactions, as well as new types of transactions relating to the sale of goods at a distance, as well as VAT settlement procedures, apply to the following legal acts:

Council Directive (EU) 2017/2455 of 5 December 2017 amending Directive 2006/112 / EC and Directive 2009/132 / EC (hereinafter referred to as EU Directive 2017/2455);
Council Directive (EU) 2019/1995 of November 21, 2019 amending Directive 2006/112 / EC (hereinafter referred to as the EU Directive 2019/1995);
Council Implementing Regulation (EU) 2019/2026 of November 21, 2019 amending Implementing Regulation (EU) No 282/2011 (hereinafter referred to as EU Regulation 2019/2026).

The new above-mentioned legal regulations apply to transactions:

domestic sales of goods by entities recognized as suppliers;
intra-Community distance sales of goods (ESPO) by suppliers or entities recognized as suppliers;
the provision of services by taxable persons, both established and not established in the territory of the EU, but not in the Member State of consumption - to consumers;
distance sales of goods imported from the territories of third countries (SOTI) by suppliers or entities recognized as suppliers, excluding excise goods.

This publication will present the role of the entity identified as the entity recognized as the supplier of goods, and thus the role of the electronic interface operator.

IE operator - an entity that facilitates the delivery

A taxpayer who acts as an intermediary in the sale of non-owned goods using an online tool (most often trading platforms - sales, distribution, warehousing, online stores and many others) will be considered an entity that facilitates the delivery of goods.

An entity facilitates the delivery of goods if it provides the relevant seller and end buyer with an electronic interface - commercial electronic tool for establishing commercial relations between them.

Transactions in which such an entity may participate include:

SOTI, i.e. distance sales of goods imported from the territory of third countries, but in shipments with a real value not exceeding EUR 150;
delivery to the territory of the EU of goods belonging to a seller who is not established in the territory of the EU, and wants to sell goods to consumers (natural persons not conducting business activity and other non-taxable entities) - in terms of both the ESPO and domestic delivery.

If we take into account the participation of the electronic interface operator in the above-mentioned sales transactions (hereinafter referred to as the IE operator), he is identified as an intermediary in the delivery of the goods, but as if he himself was the supplier of the goods and carried out the (second) delivery of the goods to the final recipient - the consumer.

Therefore, the IE operator will mediate the delivery of goods:

placed on the market in the territory of the EU and those which are already in the territory of the EU and will be delivered to recipients in the EU, regardless of their value, where the registered office of the relevant seller is outside the territory of the EU;
supplied to buyers in the EU and imported into the EU - with an actual value not exceeding EUR 150, regardless of whether the relevant supplier is established within or outside the EU.

To better illustrate the functioning of the IE operator recognized and not recognized as an entity facilitating the delivery of goods, special comparisons are presented in the table below.

Electronic interface operator recognized or not as an entity facilitating the delivery of goods, i.e. a supplier of goods
The shipment of goods takes place from the territories of third countries within the territory of the EU		Goods are not dispatched from the territories of third countries to the territory of the EU
Shipment applies to goods in real value shipments:		The seller of the goods is the supplier:
Exceeding the value of EUR 150	Not exceeding a value of EUR 150	Based outside the EU	Based in the EU
IE operator not recognized as provider	IE operator recognized as provider		IE operator not recognized as provider

The delivery of goods via the IE operator is divided into two stages

The IE operator, who is identified as an entity facilitating the delivery of goods, is treated as if he himself received and delivered the goods (separate delivery of goods).

This means that the delivery of goods with the participation of the IE operator is divided into two stages (two separate deliveries of goods):

delivery of goods from the appropriate seller to the IE operator - delivery from company to company (B2B);
delivery of goods from the IE operator to the final recipient in the EU - delivery from the company to the consumer (B2C).

The IE operator will not always be considered to facilitate the delivery of goods

Each transaction involving the IE operator must be considered individually. Importantly, the IE operator will not always be identified as the supplier of the goods, as if it were selling them to the final recipient in the EU. Instead, it may be involved in multiple deliveries of goods, but not be identified as facilitating the delivery of goods.

Therefore, each transaction involving the IE operator must be considered individually in this respect. A helpful tool in this case may be the brief analysis presented in the table below.

Exclusions from recognizing the IE operator as a supplier of goods
The specificity of the goods	Example
Goods in shipments with an actual value not exceeding EUR 150	imported into the territory of the EU, regardless of the place of establishment of the relevant seller
Other goods regardless of their value	previously placed on the EU market and already in the territory of the EU - delivered to buyers in the EU if the relevant seller is located in the EU

The IE operator is not considered an entity facilitating the delivery of goods if it does not take any, even indirect, participation in three key transaction levels:

when ordering or delivering goods;
when determining the conditions under which the delivery of goods will be performed;
in the buyer's payment flow process.

However, if the IE operator contributes to any involvement in any of the above sections of the goods delivery transaction, then it can be identified as facilitating the delivery of goods.

In addition, the IE operator is not considered to facilitate the delivery of goods if it undertakes one or more of the activities listed below:

advertising of goods,
processing the payment process for the delivery of goods,
electronic sending of buyers to the website of another IE operator with the absence of any participation in a given delivery of goods.

IE operator's participation in the mechanism of ordering and delivering goods

The IE operator may be considered an entity facilitating the delivery of goods, if it participates in any way in one of the three above-mentioned transaction levels. One of them is the participation of the IE operator in the overall procedure of ordering and delivering goods to the final recipient in the EU.

Therefore, it has a real impact on the obligations and privileges of the seller and the buyer of goods and may directly or indirectly shape the pricing, discount, logistics, use of the trading platform, as well as other important areas of the transaction. Proposals for participation in determining delivery conditions by the IE operator are included in the table below.

Some activities qualifying the participation of the IE operator in ordering and delivering goods
No.	Type of activities carried out by the IE operator
1	Sending the process of ordering goods for the buyer and the details of the order to the appropriate seller of goods with an annotation about the possibility of starting the contract
2	Providing the customer and the relevant seller with an order processing tool
3	Collection of fees for brokerage in the delivery of goods
4	Logistics organization, i.e. shipping, transport, storage of goods
5	Sale of goods distribution services

Defining the terms of delivery of goods by the IE operator

The IE operator may be considered an entity facilitating the delivery of goods, if it participates in any way in the process of determining the conditions under which it will be performed.

Some activities qualifying the participation of the IE operator in determining the terms of delivery of goods
No.	Type of activities carried out by the IE operator
1	Influencing the shape of the product offer
2	Share people to decide on prices, discounts, the form of price reduction programs
3	Possibility to download the buyer's contact and address data
4	Deciding on the payment method
5	Determining shipping methods
6	Providing buyers with a tool in which they will find convenient conditions for placing orders, choosing payment methods, shipping options, receiving the newsletter, information about each stage of shipping, along with confirmation of electronic payment, general customer service and subsequent service
7	Modification of the conditions for the return of goods along with the improvement of this process and influencing the participation of the costs of returning goods between him and the supplier and the buyer

IE operator participation in some payment processes

The IE operator will be considered to be a facilitator of the delivery of goods if it takes direct or indirect participation in one of the three above-mentioned types of activities. One of these types is the participation of the IE operator in the approval of the payment received from the final buyer.

Some examples of these activities are presented in the table below.

Certain activities qualifying the participation of the IE operator in the approval of the payment received from the final buyer
No.	Type of activities carried out by the IE operator
1	Providing the buyer with a complete set of data necessary for the customer to make payment for the ordered goods
2	Provides a tool that collects financial data about the buyer's payment card, credit card and redirects it to the financial institution making the payment
3	After receiving the payment from the buyer, he transfers the fee after deducting the commission
4	Other features, options that facilitate the payment (without processing this payment)

Several IE operators - which one is right?

The IE operator can be considered to facilitate the delivery of goods if it enables, via the electronic trading platform, the contact between the buyer and the supplier who offers goods for sale via the electronic interface, which results in the delivery of the goods via this interface.

It should be emphasized that there is a question of one entity facilitating the delivery of goods, and therefore only one IE operator may be considered in a given transaction as an entity facilitating the delivery of goods, despite the possible participation of several IE operators.

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What could be the primary distinguishing feature?

Other potential IE operators in a given transaction will make deliveries qualified as B2B. The IE operator considered to facilitate the delivery of goods will organize the order of goods and delivery to the end customer, i.e. in the B2C formula. As a result, a sales contract will be concluded with the buyer through the IE operator.

Example 1.

A consumer from the EU wants to buy headphones from the IE operator. It turns out, however, that after clicking the order, it was redirected to another IE operator - to a different page of the trading platform. On this page, the buyer ordered the headphones and received a distance sales contract through the last operator IE.

Although two operators participated in the entire transaction, the role of the first one was limited only to redirecting the buyer to the site of the IE operator, where he actually placed the order and concluded a distance sale contract.

The identification of the IE operator in a transaction always requires individual consideration, as in practice very different cases may take place, e.g. the IE operator may purchase goods from another IE operator due to a lack of goods. The key factor in most of them will be the operator through which the contract of sale was actually concluded with the final buyer, bearing in mind the aforementioned conditions.