Finance Act 2021

8 (1) Schedule 9ZC to VATA 1994 is amended as follows.

(2) Before paragraph 2 insert—

“1B This Act has effect as if after section 5A there were inserted—

“5B Supplies of goods in Northern Ireland facilitated by online marketplaces: deemed supply

(1) This section applies where—

(a) a person (“P”) makes a taxable supply of goods in the course or furtherance of a business to another person (“R”),

(b) the supply is facilitated by an online marketplace, and

(c) either the IOSS scheme condition or the Union goods condition is met.

(2) For the purposes of this Act—

(a) P is to be treated as having supplied the goods to the operator of the online marketplace, and

(b) the operator is to be treated as having supplied the goods to R in the course or furtherance of a business carried on by the operator.

(3) The IOSS scheme condition is met where—

(a) R belongs in Northern Ireland and is not a taxable person,

(b) the supply is a qualifying supply of goods within the meaning of Schedule 9ZE, and

(c) the operator of the online marketplace is registered under that Schedule.

(4) But the IOSS scheme condition is not met where—

(a) P is established in the United Kingdom, and

(b) the supply involves the removal of goods from Great Britain to Northern Ireland.

(5) The Union goods condition is met where—

(a) P is not established in Northern Ireland or a member State,

(b) R either—

(i) belongs in Northern Ireland and is not a taxable person, or

(ii) belongs in a member State and is not liable or entitled to be registered for VAT in accordance with the law of that member State, and

(c) the supply is a supply of Union goods that are located in Northern Ireland at the time they are supplied.

(6) But the Union goods condition is not met where—

(a) P is established in Great Britain, and

(b) R belongs in Northern Ireland.

(7) In this section, “Union goods” has the same meaning as in Regulation (EU) 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (see Article 5(23) of that Regulation).””

(3) After paragraph 2 insert—

“2A In Part 2 of Schedule 8 (zero-rating: the groups), Group 21 (online marketplaces: deemed supply) has effect as if after Item 1 there were inserted—

“2 A supply by a person not established in Northern Ireland or a member State that is deemed to be a supply to an operator of an online marketplace by virtue of section 5B (as it has effect in accordance with paragraph 1B of this Schedule).””

(4) In paragraph 3, after sub-paragraph (1) insert—

“(1A) Sub-paragraph (1) has effect as if at the start there were inserted “Subject to paragraph 6ZA,”.

(5) After paragraph 3 insert—

“3A Schedule 11 has effect as if after paragraph 6 there were inserted—

“6ZA (1) An operator of an online marketplace must preserve and make available records relating to a relevant taxable supply in accordance with the requirements of Article 242a of the VAT Directive and Article 54c of the Implementing Regulation.

(2) In this paragraph—

• “the Implementing Regulation” has the same meaning as in Schedule 9ZE;

• “relevant taxable supply” means a supply of goods where that supply is deemed to be a supply by an operator of an online marketplace by virtue of section 5B (as it has effect in accordance with paragraph 1B of this Schedule);

• “the VAT Directive” has the same meaning as in Schedule 9ZE.”

3B (1) Sub-paragraph (2) applies (instead of section 6) to a supply of goods deemed to have taken place by section 5B(2)(a) or (b) (as it has effect in accordance with paragraph 1B of this Schedule).

(2) The supply of goods is to be treated as taking place at the time when payment for the goods has been accepted within the meaning of Article 41a of the Implementing Regulation.

(3) In this paragraph, “the Implementing Regulation” has the same meaning as in Schedule 9ZE.”

(6) Before Part 3 insert—

“PART 2A Modification of the Value Added Tax Regulations 1995

5A (1) In the Value Added Tax Regulations 1995 (S.I. 1995/2518), Part 3 (VAT invoices and other invoicing requirements) has effect subject to the following modifications.

(2) In regulation 13 (obligation to provide a VAT invoice), paragraph (1C) has effect as if—

(a) in sub-paragraph (a), after “section 5A” there were inserted “or 5B (as it has effect in accordance with paragraph 1B of Schedule 9ZC to the Act)”;

(b) in sub-paragraph (b), after “section 7(5B) of” there were inserted “, or paragraph 38 of Schedule 9ZE to,”.

(3) In regulation 13A (electronic invoicing), paragraph (5) has effect as if—

(a) in sub-paragraph (a), after “section 5A” there were inserted “or 5B (as it has effect in accordance with paragraph 1B of Schedule 9ZC to the Act)”;

(b) in sub-paragraph (b), after “section 7(5B) of” there were inserted “, or paragraph 38 of Schedule 9ZE to,”.

(4) Regulation 16B (retailers’ and simplified invoices: exceptions), has effect as if—

(a) in sub-paragraph (a), after “section 5A” there were inserted “or 5B (as it has effect in accordance with paragraph 1B of Schedule 9ZC to the Act)”;

(b) in sub-paragraph (b), after “section 7(5B) of” there were inserted “, or paragraph 38 of Schedule 9ZE to,”.”