Online transactions are on the rise

To better understand the problem, it is important to mention that online transactions have seen a steady rise in their use ever since the Covid-19 pandemic struck our lives a couple of years ago. Nowadays, more and more consumers have become used to purchasing their products or services using the online modality.

Professor Richard T. Ainsworth, at the Boston University, published a paper on the so-called “Netflix Tax”, in which he examines how the technology-accelerated increase in cross-border sales threatens revenue in residence-based VAT systems and how companies like Netflix could be taxed. He also compares New Zealand’s legislative approach with technological solutions that TaxCore® powers (such as Fiji’s VMS system) and considers how the approaches combine to fight tax loss. Obviously, this problem has only become more serious since the Covid-19 pandemic outbreak.

What does the law prescribe under these circumstances?

The law is very clear in these situations. Remote, electronic, or “online” trade differ only in one aspect: the personal presence, or absence, of the seller and buyer. It is not mandatory for the buyer/seller to be physically present in the store for the sale to happen. In order to be a legal business, online stores do, however, need to comply with the regulations on fiscalization. This is already present in fiscalized countries using the TaxCore® system such as Serbia.

Merchants selling goods over the Internet, like conventional brick and mortar businesses, have to record the turnover through fiscal devices. They do this to issue a fiscal invoice to the customer together with the product or service, and to record transactions via an electronic fiscal invoice. Merchants can also send invoices electronically as long as the customer gives their consent.

What about the specifics, like the cost of delivery?

Whether or not a merchant will issue a separate fiscal invoice for the delivery of the goods ordered over the Internet will depend on whether we include the cost of delivery in the price. If the merchant includes the cost of delivery in the price of the goods paid by the customer, it will reflect on the fiscal invoice. If, however, the customer paid only for the goods, without the delivery costs, the delivery company (if it’s a separate company from the retail online shop) will have to issue a separate fiscal invoice for the delivery costs. In any case, a merchant needs to always show the delivery costs on the online store in which customers buy the goods.

In Data Tech International, we always like to remind everyone that a fiscal invoice is of extreme importance since it serves as proof that the tax for a particular purchase has been correctly calculated and paid. By following these simple rules, we make sure to return these funds to the Tax Administration budget which are in turn used for the construction of highways, hospitals, schools, and kindergartens, directly benefiting the citizens.

Therefore, by asking for a fiscal receipt, citizens can actively aid in the fight against the grey economy and thus contribute to the further development of the state and society. 

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