The July 2021 EU ecommerce VAT package imposes obligations on EU and non-EU sellers making imports to consumer to charge VAT in the checkout on sales not exceeding €150. However, there is a ‘Special Arrangements’ exemption whereby the seller can have a postal service tax over the VAT collections role.
Sellers and facilitating marketplaces of import consignments not exceeding €150 must collect the VAT at the checkout. They may then declare the VAT they collect on via the new Import One-Stop-Shop IOSS – a single return of all EU imports. The Special Arrangements is an optional alternative for them.
Special Arrangements let marketplaces off the import VAT hook
From 1 July 2021, all imports into the EU will be liable to VAT. The €22 VAT-free exemption will be withdrawn.
Sellers and deemed supplier marketplaces may alternatively opt to pass the import VAT collections to postal operators, express carriers and customs agents. Under the special arrangements, the customer pays the VAT to the declarant/person presenting the goods to customs. The Special Arrangements operators then pay the tax authorities on a monthly basis on a cash-received basis. The deadline will be the 16th of the month following the month of import.
Member states may allow operators to apply the standard VAT rate to all these transactions. This limits the risk of fraud or mistaken classification on reduced VAT rate goods, and helps the Special Arrangement operators who are unable to determine the correct VAT rate.