The EU have announced new VAT rules starting from the 1st July 2021. The rules are going to affect each part of the supply chain in different ways, in this article we talk about the role of Postal Operators and Couriers involved in shipping goods to and from the EU and how the new rules will affect them and what they need to do.
New Simplified Mechanisms
The EU will introduce two new simplified VAT collection mechanisms for collecting VAT on imported goods with a value that does not exceed EUR 150.
- Online sellers and online marketplaces / platforms will be able to collect VAT directly from the buyer and report and pay the VAT in the new online system Import One Stop Shop (OSS)
- Postal operators and couriers will be able to declare and pay import VAT via special arrangements in case the sellers or the maketplaces/platforms did not choose to register in the IOSS system.
What do Postal Operators and Couriers need to do?
Sellers and marketplaces must declare for qualifying shipments their IOSS registration number to the postal operators and couriers when declaring goods upon importation into the EU. The postal operator/courier will present the IOSS number to customs who will check for the validity of the number, once this has been confirmed the packages can be delivered to the customer in the EU. As simple as that.
If the seller or marketplace dispatching the goods do not register for IOSS then VAT still needs to be collected before the goods can be delivered to the customer. In this case, goods can only be custom cleared in the Member State where the goods will be delivered to the customer. The collection of the VAT may be done by;
- Postal operators and couriers will collect the VAT from the end-consumer in the EU and will pay the VAT to the competent authorities on a monthly basis. This simplification provides a cash flow advantage for the postal operators and couriers in aid to combat for the additional administrative tasks relating to the collection of VAT
- The customer will pay the VAT to the postal operator or courier or directly to the competent authorities before goods can be released from customs and delivered.
What are the Benefits to Postal Operators and Couriers?
The European Commission state that Postal Operators and Couriers will have greater ownership over goods, VAT and the customs procedure as key players in the transport and distribution of goods to customs. The new rules will create a faster process for clearing customs and the ability to transmit data electronically should speed up the delivery of goods and customs declarations.