The new VAT rules have been implemented in July 2021 for distance sales of goods inside and outside the EU. From 1 July 2021, the exemption from value-added tax (VAT) on imports of goods with a value not exceeding EUR 22 will be abolished.
As a result, VAT will be due on all goods imported into the EU. For imported goods with a value not exceeding EUR 150, two simplified VAT collection mechanisms are available:
One for online sellers and online markets/platforms that can collect VAT directly from the buyer and can report and pay this VAT in the new electronic system called the one-stop-shop for imports (IOSS);
One for postal operators and couriers to declare and pay VAT on import (special mechanism), if sellers or online markets/platforms have not chosen to register in the IOSS system.
Nothing changes as to the collection of customs duties and VAT on imported goods with a value of more than EUR 150.
As a key player in the transport and distribution of goods, you are at the forefront of declaring goods at customs. Inform and advise your customers on how to adapt to the new process.
What should postal operators and couriers do?
When registering with IOSS, online sellers or online markets/platforms receive an identification number for VAT purposes for IOSS. This VAT identification number for IOSS is used by postal operators and couriers to declare goods for import to the customs authorities. They may do so in any EU Member State, regardless of the destination of the goods. The customs authorities check the validity of the VAT identification number for IOSS and then it helps for easy delivery of the package to the customer.
If online sellers or online markets/platforms do not register for IOSS, VAT must be collected before the goods can be delivered to the customer. Under such cases, the goods can only be cleared in the EU Member State where they will be delivered to the customer.
Collect VAT using the special mechanism, postal operators and couriers will collect VAT from the customer and pay it monthly to the competent authorities.
This simplification provides benefits in terms of cash to postal operators and couriers to compensate for additional administrative burdens related to VAT collection using standard customs procedures: the customer will pay VAT to postal operators, couriers or directly to the competent authorities.
What about distance sales within the EU?
The rules on distance selling on intra-EU goods are simplified for online companies and online markets/platforms, reducing the administrative burden and creating the conditions for increasing e-commerce within the EU. Postal operators and couriers can benefit from the EU digital single market because there are no borders within the EU.
Benefits for postal operators and couriers
– greater accountability: As key players in the transport and distribution of goods, you are at the forefront of declaring goods at customs;
– faster processing: The new rules, including the transition to electronic data transmission, aim to simplify procedures and ensure faster customs clearance so that you can deliver the goods to your customers very quickly.
Distance sales of goods imported from third countries or third territories refer to deliveries of goods dispatched or transported by or on behalf of the supplier, including where the supplier is indirectly involved in the transport or dispatch of goods to a customer in an EU Member State.
Intra-EU distance selling of goods refers to deliveries of goods (which are already in free circulation in the EU) in one Member State, sold and sent by or on behalf of the supplier/seller of a customer from another Member State.
The EU Member States are:
Austria, Belgium, Bulgaria, Czech Republic, Cyprus, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and Hungary.