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Who is affected?

All players in the e-commerce supply chain are affected, from sellers and marketplaces/platforms, both within and outside the European Union, to postal operators and courier companies, customs and tax authorities in the various Member States of the European Union, and consumers.

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Postal operators and couriers

(This information is also of interest to freight forwarders, logistics service providers and customs agents.) The huge rise in e-commerce and distance sales of goods has meant that the roles and responsibilities of postal operators and couriers have changed dramatically, if only because of the sheer volume of purchases consumers now make online. Currently, low-value goods are exempt from VAT when imported into the EU. However, there is no similar exemption for sales of small value goods within the EU. To address these differences in VAT taxation that lead to loss of public revenue and to overcome obstacles to cross-border online sales, the VAT regulations on e-commerce are being amended.

The new regulations on VAT in electronic commerce provide a simple and uniform set of rules for all companies that carry out cross-border electronic commerce, whether from within or outside the EU This harmonization will create a level playing field for all businesses and provide opportunities for intra-EU trade to increase significantly.

In parallel, all commercial goods imported into the EU will be subject to VAT , regardless of their value, meaning that there will no longer be an exemption for imported goods with a value of up to 22 euros. Sellers and online marketplaces/platforms that make remote sales of imported goods to customers in the EU for a value not exceeding 150 euros can use the new special Single Window scheme of Import (IOSS) to declare and pay VAT. In this situation, the responsibility for the collection of VAT will not fall on postal operators and couriers

Sellers and online marketplaces/platforms using IOSS will have to provide the information necessary for customs clearance in the EU , including the VAT identification number from IOSS. Electronic marketplaces that are not involved in the dispatch or transportation of the goods will provide this information to the seller, agreeing to strict rules on the use of their VAT IOSS identification number, including its communication to carrier and/or to the customs declarant.

This is necessary to avoid VAT being charged on import and, therefore, to accelerate the release of goods into free circulation. The end result should reduce stress at this critical stage of the supply chain. Postal operators and courier companies will not have to, and indeed cannot, check the validity of this IOSS VAT number, but it is important to be aware of the change in procedures.

For sellers or marketplaces/platforms that do not register with the IOSS, the competent authorities will collect VAT on the importation of small value goods just as is now collected VAT ##2##on goods of higher value at customs. EU customers will only receive purchased goods after paying VAT.

Postal operators and courier companies may also charge an additional clearance fee to the customer for collecting VAT and completing the necessary procedures at the time of import of the goods. This means that, as EU customers are used to prices including VAT , paying additional fees at the time of import could cause the customer to reject the package in question.

Postal operators and courier companies can resort to a simplification according to which the customer's VAT is collected and paid monthly. This simplification offers them a cash flow advantage to offset the additional packages that will require customs clearance, which will entail increased administrative work.

It is important to communicate these changes to your company's customers and encourage adoption of IOSS so that everyone can benefit from the simplification of the system.

The new rules will provide:

  • Major property: As key players in the transport and distribution of goods, postal operators and couriers are on the front line when it comes to declaring goods at customs.

  • A faster process: The new rules, including the adoption of electronic data transmission, are ultimately intended to simplify procedures and ensure faster customs clearance so that postal operators and couriers can deliver goods more quickly to their customers.