Over the past two decades, booming e-commerce trade, coupled with import VAT exemptions for e-commerce goods valued at 22 EUR or below, have resulted in billions of euros being lost to EU Member States which in turn has also led to the undervaluation of imported goods, poor data accuracy and even worsened security.
To tackle the above-mentioned concerns and to establish a level playing field between EU and non-EU merchants, the European Council decided to act and modernize regulations regarding how e-commerce trade was to be conducted with the bloc.
The European Commission has thus proposed a new VAT e-commerce package which aims at (1) ensuring that VAT on imported low-value e-commerce goods is paid correctly by non-EU e-sellers to the EU Member State of destination and at (2) simplifying declaration and payment of VAT on distance sales. These simplified, newly proposed VAT declaration and collection schemes should ensure that e-commerce goods will benefit from VAT exemption upon importation, allowing a fast release of imported goods at EU national customs.
The new VAT e-commerce package and law comes into effect on 01.07.2021.
Feeport has developed a software platform – X7trade – which enables non-EU businesses like e-retailers, marketplaces, consolidators, and logistics service providers to meet new regulatory requirements and declare e-commerce goods destined for the EU end consumers in a secure and efficient manner.
We have developed strong communication channels with multiple EU Member State Customs Development teams in The Netherlands, Finland, Latvia, Lithuania, Bulgaria and Belgium. Eventually, we want our platform – x7trade – to be connected to as many as possible EU Member States import customs systems.
In Estonia, we have successfully completed tests over the X-road data exchange layer with The Estonian Tax and Customs Board’s new clearance system IMPULSS. In Finland, we have successfully tested and connected to Finland´s new Customs Clearance System – UTU.