1st July: EU VAT changes – Are you ready?
June 24, 2021
EU VAT rules change on the 1st July 2021 and every product that is sold from a non-EU country (e.g. USA, Great Britain, China), will now be liable to import taxes.
The EU wide changes take effect on the 1st July 2021 when the €22 ($26) tax exemption limit will end. This means that every product that you buy in a non-EU country (e.g., USA, Great Britain, China), will now be liable to import duties.
The EU Commission introduced the measures to remove the tax advantage towards non-EU mail order companies and strengthen member states domestic economies and stop VAT fraud.
Taxes are payable on all consignments of goods arriving from a non-EU country if they exceed the amount of €1 ($1.22). Additionally, carriers can charge a flat-rate service fee of €6 ($7). This is paid either by the customer at the time of delivery, or they have to be prepaid by the shipper.
FedEx has a short explainer video on Facebook you can watch here.
If you sell into the EU, you need to register for the new EU VAT system and use the Import One Stop Shop (IOSS). You only need to register once and that applies to all EU member states. You as the seller, will be obliged to pay the taxes due to the EU via the IOSS VAT system and the taxes should be included in the seller’s final invoice amount.
FedEx has a short explainer video on Facebook you can watch here.
Categories : Around the Industry
