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EU buyers - the end of VAT exemption (July 1, 2021)

Discussion in 'Marketplace Discussions' started by J.A.W., Dec 24, 2020.

  1. J.A.W.

    J.A.W. Music Addict Thread Starter

    This may be of interest to all EU residents who buy stuff from outside the EU. At the moment goods whose total value does not exceed 22 euros can be imported tax-free from non-EU countries, but that will change: from July 1, 2021 VAT is payable on all goods imported into the EU from non-EU member states, regardless of the declared value.

    Just thought I'd mention it here.
     
    Last edited: Dec 24, 2020
    jay.dee likes this.
  2. Nightswimmer

    Nightswimmer Forum Resident

    Location:
    Germany
    This will not change anything in Germany, because you do not have to pay VAT (specifically Einfuhrumsatzsteuer/EUSt) if the amount due to be paid is 10 Euros and below.

    § 15 EUStBV 1993 - Einzelnorm
     
  3. J.A.W.

    J.A.W. Music Addict Thread Starter

  4. jay.dee

    jay.dee Forum Resident

    Location:
    Barcelona, Spain
    I wonder if it applies to any shipment or only those sold by commercial entities; in Spain there has been a different VAT-free limit for individual and company-originated non-EU imports: 22€ vs 45€.

    In any case the sellers will be able to sign up to an upfront VAT collecting system (similar to eBay's or Amazon's), which will spare their clients a tax handling fee imposed by all carriers.

    IOSS - Taxation and Customs Union - European Commission
     
  5. Sorcerer

    Sorcerer Forum Resident

    Location:
    Netherlands
    We used to have such a difference, but it could not be relied upon to be applied fairly. If authorities decided to tax you anyway, appeal was useless.

    I expect all shipments to be taxed indiscriminately now upon entry. Sure, established large scale upfront collection and shipment schemes like Amazon's will continue to function. IOSS might cause chaos and double taxation. Call me a glass half empty kind of guy.
     
    MC Rag and jay.dee like this.
  6. jay.dee

    jay.dee Forum Resident

    Location:
    Barcelona, Spain
    Well, I have just made a few purchases in Japan to stack up CDs for summer holidays listening (and calm observing of the implementation of the new VAT order). :)
     
    MC Rag and Sorcerer like this.
  7. Ironbelly

    Ironbelly Forum Resident

    Location:
    Porto, Portugal
    One of my packages from Japan was stopped for inspection by local custom authorities. The price overshoots 22 € for a couple of cents ( believe something was wrong with currency conversion). Thus, I had to pass through all the procedure to pay VAT (or IVA, as it is called here). It was not that difficult at all, completely digital process. And I do not complain about a couple of €€ to add to the cost.

    The bad part is - the local post charged me extra service fee of 12 € for processing my mail through the customs. And this is almost 50% of the initial price of the item that went to local post virtually for nothing.

    So, you know, you should not worry about 20-25% VAT but about stupid fees you shall pay to your local post if VAT was not included to the tax declaration at the sale point (i.e. in Japan by cdjapan or buyee).
     
    MC Rag likes this.
  8. Sorcerer

    Sorcerer Forum Resident

    Location:
    Netherlands
    I think those flat fees are even a bit higher here. Around €13/4 (PostNL) or €14.50 (with DHL). Complete rip off. I hope CD Japan will sign up for IOSS.

    It's the death for buying from private sellers on Discogs, though.
     
    jay.dee and MC Rag like this.
  9. joachim.ritter

    joachim.ritter Senior Member

    I wonder how Discogs will implement it, but I assume European buyers will have to pay (additional) VAT in many cases, even if buying from other EU countries.
     
  10. MC Rag

    MC Rag Forum Resident

    I am in UK and just received this email from Ebay:

    Hello,

    From 1 July, and in line with new legislation, eBay will collect VAT on all goods which are sold through eBay and shipped to buyers in the European Union (EU) with a consignment value up to EUR150. eBay will collect VAT on all sales to private individuals, regardless of seller status. eBay will declare the VAT collected under our Import One Stop Shop (IOSS) number.


    As EU customs need to identify if VAT has already been paid for EU imports, eBay’s IOSS number needs to be shared electronically with carriers. In cases where eBay has collected VAT and the goods are shipped from the UK, you are responsible for sharing eBay’s IOSS number with your carrier. Failure to share eBay’s IOSS will lead to buyers paying VAT again on delivery. Note that the Post Office systems do not accept a manually provided IOSS number.


    If you continue sending parcels through the Post Office without pre-purchasing labels through Click & Drop or the other alternatives set out below, your buyers may have to pay VAT again on delivery.


    To simplify the process, we will enrol you into the Global Shipping Programme (GSP) by 1 July. You will receive an email once we have successfully opted you in with further details and a link to opt-out should you wish to do so. GSP will ensure that the IOSS is correctly transmitted and that all customs charges/processes/international delivery is taken care of. All you have to do after a sale transaction is post your parcel to the UK Shipping Centre. Learn more here.


    If you wish to continue to post packages to Europe yourself using the Royal Mail or an express carrier service, the alternative postage methods available to you, where you can electronically declare eBay IOSS to your carrier are:



    • eBay labels Packlink. Read more here.



    • Royal Mail Click & Drop account linked to eBay account. Labels can be dropped off at the Post Office once printed. Read more here.



    • Buy postage online with a carrier (Hermes/Parcel2Go/DPD/UPS) and electronically declare eBay’s IOSS number.
     
    Ironbelly and jay.dee like this.
  11. Ironbelly

    Ironbelly Forum Resident

    Location:
    Porto, Portugal
    Smart move from ebay. They will simplify your life by GSP but will add the same ~10€ extra burden on the buyer.
     
  12. MC Rag

    MC Rag Forum Resident

    So basically UK sellers will lose many buyers from EU. It sucks.
     
  13. joachim.ritter

    joachim.ritter Senior Member

    Yes, it looks like that.

    Consequence of Brexit.
     
  14. Ironbelly

    Ironbelly Forum Resident

    Location:
    Porto, Portugal
    They already did. Currently GSP from the UK is 10-12£ to my woods. I am skipping sellers that offer GPS for ages.
    I am not complaining if the seller offers registered post but no extra money to ebay for stupid proxy service.
     
    jay.dee likes this.
  15. MC Rag

    MC Rag Forum Resident

    Do many UK sellers do GSP, I thought it was mainly Americans?
     
  16. MC Rag

    MC Rag Forum Resident

    Doesn't your new tax apply to whole world?
     
  17. Ironbelly

    Ironbelly Forum Resident

    Location:
    Porto, Portugal
    Yes, they do. Even if the price for the used CD is set as 1.99£.
    GSP simplifies life of the seller and secures delivery for the buyer. But the buyer should pay extra.
     
  18. joachim.ritter

    joachim.ritter Senior Member

    Yes, same with the UK VAT. UK just doesn't enforce it so far. Amazon and ebay implemented it, Discogs probably will do it sooner or later.
     
  19. jay.dee

    jay.dee Forum Resident

    Location:
    Barcelona, Spain
    I have also tried to avoid Global Shipping Program offers on eBay as much as I could, but with the new VAT enforcement on every package the GSP will become actually the preferred option, because eBay's overhead (included in the GSP shipping cost) will cost less than any carrier's usual extortion/handling fee (~14€ here).

    And the biggest winner will be Amazon, which charges VAT only and keep their shipping cost very low.
     
    MC Rag likes this.
  20. joachim.ritter

    joachim.ritter Senior Member

    We need to see whether creating shipping labels without GSP will be really a big deal.

    If I sell something to the UK via eBay there is just one extra line added to the address of the buyer which tells that VAT has been paid.

    Maybe it will be as easy as that for shipping from the UK to the European Union, too.
     
    MC Rag likes this.
  21. MC Rag

    MC Rag Forum Resident

    It will be interesting to see how each country in the EU actually applies this.

    In the UK new rules came into effect on December 31st 2020 so that the overseas seller of any item below £135 would need to collect 20% VAT and register with UK Revenue & Customs to send them the money (which no individual seller or small business is likely to do). I presume the seller is then meant to indicate they have paid this on the customs label.

    In reality what has happened so far is nothing.

    I have bought 20 or so items from Discogs (a platform that is not automatically collecting VAT like Ebay/Amazon now does) and all have made it through to me from all over the world with no stoppage or charges at UK Customs at all. In fact many of these items would have previously been stopped by UK Customs (anything over £15) and I would have had to pay a charge, but now everything even with a declared values of £100 is arriving to me - maybe this will change in future?
     
    jay.dee likes this.
  22. joachim.ritter

    joachim.ritter Senior Member

    Amazon and ebay are already handling this for the sellers. So sellers don't need to register individually (unless they sell through other channels as well).

    Depending on some details it can happen that VAT is paid twice, both in the UK and in a country of the European Union.

    This will change for sure. And at some point Discogs will have to implement those rules as well because otherwise most sellers will stop selling/shipping to UK buyers.
     

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