Customs in the European Union. New VAT rules from July 1st

Started by mmiguel, June 17, 2021, 08:42:37 PM

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mmiguel

Hello,

As you may know, next July 1st there are some changes regarding the VAT for e-commerce in the European Union.

As buyers, the two main points are:

1) No exemption for low value items. Until now, purchases below 22€ were VAT-free.
2) Possibility for the seller to register in the IOSS (Import One Stop Shop) so that when buying, you pay directly VAT and theoretically it should arrive without additional duties.

Any thoughts? As I have understood, UK sellers at ebay work kind of this way since Brexit: buyer pays VAT to eBay and seller ships to eBay hub through the Global Shipping Program, which does the red tape, pays the duties and forwards the item to the buyer.

However, I am afraid it may not be as easy as it looks, because:

A) Global Shipping Program means having a hub. What about smaller countries without one?

B) I've seen eBay allows sellers to give financial data and pay VAT for them. How does it work? Like, once VAT is paid, does eBay give the seller a code which has to attach somehow at the package? Will local Post check that code for free?

C) I'm using eBay as an example, which could work for big marketplaces or big stores, but small independent sellers won't join IOSS and keep shipping as now, meaning more and more people will get their purchases taxes with VAT (which is OK) and administration fees (which in Spain means 20€ if you pay the mailman by default, or 6€ if you go through some red-tape with the Tax Autorities and delays things a couple of weeks).

And regarding coins in particular:

D) Will single coins inside a cardboard on an envelope go through, as many times they're sent as a letter?

E) Coins (old coins at least) have reduced VAT fees (at least in Spain). Will marketplaces acknowledge that?

I would be really interested if someone from the UK has had similar experiences. From what I've seen online, outrage comes with the supression of the 22€ limit, which in practice it means stopping every single package. Until now, reality was what it was, some countries taking it lightly, with many packages going through "for free". Which of course was some kind of tax evasion, not counting when some sellers from certain countries deliberately undervalue their products.

Thank you, BR

FosseWay

... and some countries messing with people's post just out of badness, as far as I can see (yes, Sweden, I mean you).

As you say, the VAT is unavoidable. But given that different EU countries have different moral approaches to the sanctity of the postal service, I'd like to see central EU action on this. In many countries, tampering with the official mail delivery provider and its operations is a specific offence, more serious than, say, ordinary theft of an item of equivalent value. This reflects the historic necessity of having a reliable postal service, and recognises that with the advent of prepaid postage in the form of stamps, people consigned their secrets and their goods into the hands of a third party, and paid that third party, with no definitive guarantee the parcel would reach its destination.

This has been eroded in general by the changes in how we use the postal service: matters of political or personal importance, whose loss cannot really be insured against, are generally transmitted by other means, while goods if stolen in transit can be insured. Hence the rise in use of recorded/registered/special delivery, which brings in $$$$ to the postal service.

I would like to see the EU, and ideally the authorities in the UK, Switzerland, Norway etc., enact clear rules that apply across their jurisdictions that do the following:

1. Outlaw additional "admin" charges connected with handling customs charges and VAT. Delivering the post is the point of these services. If the government requires extra steps, that is a matter between the postal service and the government, not the end user. When I go to the supermarket I don't get presented with a 75 kr "admin fee" levied by the supermarket to cover the cost of administering the VAT or other duties due on certain goods. It should all be part of the overheads covered by the general postal tariff (which in the case of Sweden is huge anyway).

2. Impose time limits on delays to parcels caused by VAT or customs issues. If VAT etc. is payable on a package then inevitably there will be a delay while that information is relayed to the recipient and they pay it. That's unavoidable and fair enough. But it is not fair enough for it to take six weeks for Postnord to even tell me I have a package in this situation, and then another six weeks to deliver it after I've paid. The limit should be based on the typical time taken for a domestic letter to be delivered. The clock should then stop while the recipient pays - which they may choose not to do, or they may be on holiday or something - and starts again once payment is received, whereafter the same limit should apply to final delivery of the item.

3. Postal services need to assume innocence until guilt is proven with regard to the information entered on customs labels. If it says the value is zero, then the value is zero unless you can prove otherwise. It isn't acceptable to delay packages because "the value can't be zero".

4. There is a word for deliberately depriving the rightful owner of their property: it is theft. Persistent failure to deliver packages should result in prosecutions for theft for those concerned. Fundamentally, it is more important for the postal service to function reliably than it is for the treasury to get twopence-halfpenny in VAT, and that difference in importance is greater the smaller the value of the goods being conveyed. A few well-targeted convictions for theft among the top brass of the EU's postal services would get rid of this problem once and for all.

If the government wishes to raise VAT on certain categories of purchase, fine - that's the kind of decision we elect them to make. But they must make that decision in the knowledge of whatever collateral costs or problems it may cause, and be prepared to take those collateral costs and problems and not simply pass them on to others. Because one thing we, as in the citizens of the EU, have not been consulted on is whether we're happy for our post to take three months just because the government wants 10c in duty.

andyg

some comments from the UK :)

Quote from: mmiguel on June 17, 2021, 08:42:37 PM
2) Possibility for the seller to register in the IOSS (Import One Stop Shop) so that when buying, you pay directly VAT and theoretically it should arrive without additional duties.

Any thoughts? As I have understood, UK sellers at ebay work kind of this way since Brexit: buyer pays VAT to eBay and seller ships to eBay hub through the Global Shipping Program, which does the red tape, pays the duties and forwards the item to the buyer.

yes - although I'm not sure how it works,  if the seller doesn't attach the right bit of paper to whatever is being sent then you get charged again....

Quote from: mmiguel on June 17, 2021, 08:42:37 PM
E) Coins (old coins at least) have reduced VAT fees (at least in Spain). Will marketplaces acknowledge that?

no.  You are being charged (as far as I can make out) for importing whatever - so you pay the full VAT.
I have to pay an £8 fee for the privilege of being told I have to pay VAT.

..also - if the item is a gift and the tax man can prove it's worth more than £39 - then you have to pay VAT too.
always willing to trade modern UK coins for modern coins from elsewhere....

Figleaf

Many words, but what matters most is: prices of coins should include tax.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

andyg

Quote from: Figleaf on June 18, 2021, 10:04:59 AM
Many words, but what matters most is: prices of coins should include tax.

Peter

true, but this was set up to counter cheap Chinese imports - which due to manipulation of the currency (amongst other unsavoury activities) are far cheaper than they should be.....
always willing to trade modern UK coins for modern coins from elsewhere....

FosseWay

Quote from: Figleaf on June 18, 2021, 10:04:59 AM
Many words, but what matters most is: prices of coins should include tax.

I don't think any reasonable person objects to that, at least subject to a de minimis clause. But it does strike me that the situation that obtains for income taxes is much better. I am resident in Sweden, earn my wages in Sweden and get most of what little bank interest I get here as well. I am therefore a Swedish taxpayer. But I do have income from the UK, and I declare that income on my Swedish tax declaration and pay Swedish tax on it. Conversely, though I have to tell HMRC in the UK about this, I do not have to pay income tax there as the UK recognises me as non-resident. All this stems from the principle that you shouldn't be taxed twice for the same income. Moreover, the UK's membership or not of the EU is entirely irrelevant to this.

There should really be a similar approach to retail quantities of goods not intended for resale. If I order something from the UK through a bona fide seller I will pay UK VAT. If someone in the UK orders something from Sweden, they pay Swedish VAT. To a certain extent it balances out; to a large extent we're talking about silly little amounts that are lost in the overall macroeconomic picture; and if any given country feels it's missing out because people in large numbers are buying a given commodity from another country, it is free to set up its own manufacture and distribution process for whatever it is, and reap the rewards locally.

mmiguel

Thank you for the comments. I got a bit lost as it developed into a higher level conversation, but I enjoyed it.

As a simple and occasional buyer, I got the insights I wanted to.

Quote from: andyg on June 18, 2021, 09:52:05 AM
although if the seller doesn't attach the right bit of paper to whatever is being sent then you get charged again....

Great. So if the UK and the EU are being that strict to each other, I can imagine what will happen with random seller from distant countries, whose Postal Services won't be familiar at all with the VAT payment number (ow whichever the name is).

Quote from: andyg on June 18, 2021, 09:52:05 AM
if the item is a gift and the tax man can prove it's worth more than £39 - then you have to pay VAT too.

Yes. The exemption here is 45€. But no surprise, at least the Spanish Post doesn't care if it's marked as a gift. They charge you by default as a comercial item and then you have to prove somehow that it is a gift, as too many people seem to have friends in distant countries...

Thank you all. My main worry is basically how it will be buying low priced coins in eBay from dealers from Singapore/China/Japan. My experience with UK sellers post Brexit was satisfactory: Global Shipping Program seems to work ok, VAT is paid directly, administration fees seem to be of about 3-4% as the VAT paid is more than 21%, and shipping is a bit more expensive than before, but I have not perceived longer delays nor I have done any red tape, which are basically my two concerns... I guess we'll have to wait how it works with other countries!

Figleaf

Paying double taxation and tax over tax are accepted practices, even when multiple taxes are staggered. Ministries of finance are the most cruel, remorseless, disorganised, out of control and powerful of ministries, bordering on being a state within the state in every country I know.

It is not a coincidence that financial and tax matters, including VAT, which is an EU competence, are the least co-ordinated within the EU, with the exception of persecution of real and perceived tax evaders and tax fraudsters. I am still utterly amazed that the Euro project could find acceptance.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

chrisild

The Austrian Mint now has a list of countries that it can ship to - and that will, as from 1 July, include France and the Netherlands again. Countries that are not listed cannot be served (may change later of course). Interestingly, in all cases the maximum order volume is €15,000 – one case is a little different however in that there is also a minimum threshold: Britain (i.e. England/Scotland/Wales) with at least €170.

Christian

mmiguel

Pobjoy Mint just sent a mail reminding us today is the last day without compulsory VAT and sayinf we could make use of that by buying sth today.
But that will be like the worst idea by far: item certainly will not arrive today, so it will 100% stopped at customs, meaning you'll have to pay not only VAT but also some extra administration taxes...