The current regulation of online cross-border trade has resulted in a significant loss of revenue for EU member states, so as of July 1, 2021, the European Union will no longer have the benefit of not paying customs duties or VAT on products from third countries. up to EUR 22. Imports of goods, with the exception of alcoholic products, perfumes and tobacco products, remain duty-free up to a limit of EUR 150, but a customs declaration must be submitted for each shipment entering the Union.
One possibility is that sellers outside the EU can register in the IOSS (Import One Stop Shop) system if they sell to more than one EU member state. Buyers then pay the seller VAT on the product when they buy. It is sufficient for a seller using IOSS to log in to a member state and pay the VAT collected from the buyer there, with the VAT collected being distributed among the customs authorities of the member states according to the destination of the goods.
Alternatively, shippers can use the “Special Arrangement” (SA) to simplify the payment of VAT by notifying the Office in advance. Special arrangements are only possible if the customs procedure is in the same Member State as the consignee. When applying the HS, the carrier collects VAT from the consignee at the time of delivery of the consignment, and then periodically declares and pays it at the tax office.
If neither the seller nor the carrier applies the facility, the fine customer must pay the duties and taxes at the time of importation.
While this may make things easier for the seller in the initial phase, it can result in decreased customer satisfaction and additional costs for abandoned sales and customer refusals.
Crossborderit (CBIT) can help. We have solutions that can help you show your customer’s target cost, collect the money and pay it on their behalf.
Transparency will help you build loyal international customers and ensure that most shipments are never stopped at the border.
Visit Crossborderit and learn more.