Status: 07/01/2021 3:47 p.m.
Anyone who buys online in non-EU countries will in future have to pay more for smaller orders: As of today, the previous tax exemption of 22 euros will no longer apply. Some customers are likely to be asked to pay by parcel carriers.
From July 1st, 19 percent VAT will be added to goods with a value of less than 22 euros that are ordered online in non-EU countries such as the USA, Great Britain or China. For books or groceries, for example, seven percent is charged.
For example, if a CD from a US mail order company previously cost 20 euros, taxes will now be charged at 23.80 euros. The actual duty, which is levied separately, continues to apply to goods with a value of 150 euros or more.
Protection against hidden costs
With this new regulation, the European Commission ends the tax preferential treatment of foreign mail order companies. Until now, traders based in the EU had to pay sales tax on all of their goods. Orders from dealers from non-EU countries, on the other hand, were exempt from import sales tax up to a value of 22 euros. This exemption limit has now been removed.
With the new regulations, the EU wants to prevent retailers from non-EU countries from being able to undercut their local competitors. In this way, customers should also be protected from hidden additional costs for customs or courier services. In future, the specified price should also be the final price. Dealers should register for this on a platform that makes it easier for them to settle VAT.
“One step forward”
“We think that consumers should accept the somewhat higher prices, because they guarantee fair competition,” comments the tax expert of the German Trade Association (HDE), Ralph Brügelmann.
The industry association for online and mail order trade bevh calls the regulations “a step forward”. For consumers, “concrete comparability” will be created for prices. In addition, national dealers would be relieved a bit in the international price war.
Prevent tax fraud
The new regulation is also intended to help prevent tax fraud. Because the exemption limit was abused for this in the past. Some retailers labeled packages with a price below 22 euros, even though a much more expensive product was included. This means that VAT was not paid automatically.
Customs only got hold of the machinations through controls. The EU Commission estimates the damage to the EU state coffers from such loopholes at seven billion euros annually.
In future it should no longer be “that someone declares something as a baby monitor for fifteen euros and ultimately an iPhone is in it,” emphasizes Brügelmann. But you also need more controls for that.
No rule without exception
In a press release on the subject, Deutsche Post DHL points out exceptions to the rule: “If the value of the goods is so low that the resulting import sales tax is less than EUR 1, i.e. up to EUR 5.23, the customs authorities waive the levying of duties . ”
In addition, no import duties would arise if the goods were ordered on an online marketplace that is already registered in the EU and that pays the applicable VAT in an EU country. “These taxes are paid directly when selling or ordering online,” it says.
Surprise at the front door?
Some consumers may have to be prepared for a surprise at their doorstep: In cases in which the sender has not already paid the import duties in advance using the appropriate procedure, Deutsche Post DHL will, according to its own statements, – as before for shipments over 22 euros Value of goods – “pay the due import duties to customs and collect from the recipient customers when the goods are delivered to their doorstep or when they are handed over to a branch”.
For this, in addition to the import duties, a flat fee of 6.00 euros including VAT, which is already known today, will be charged, the logistics group continues.
Significant additional work for customs officials
The German Customs and Finance Union (BDZ), on the other hand, is critical of the additional work that it believes is associated with the new regulation. Overall, the new regulations will result in a large number of additional electronic customs declarations at German customs, according to the BDZ. “Originally, the customs authorities assumed around 100 million additional consignments to be cleared under customs law. In the meantime, however, experts are expecting significantly more customs declarations,” writes the BDZ in a current statement.
The bulk of the additional customs declarations will be at the expense of the quality of work, the controls and, last but not least, the functionality of the customs offices without personal and digital support, it goes on to say: “The clearance volume is increasing exorbitantly due to Brexit and e-commerce, there are no staff!”