New cross-border e-Commerce VAT rules

Starting 1st of July 2021, the European Union will update the VAT system for import into the EU. They have passed new legislation, to simplify and standardize VAT in Europe, create a transparent and equal trading environment for cross-border eCommerce, and fight against VAT fraud. Low-value parcels with a value of less than 22€ are currently VAT-exempt. From 1st of July 2021, these parcels are no longer exempted from VAT.

All parcels with a value up to 150€ will be subject to VAT, i.e. the low-value parcels will then be treated in the same way as mid-value parcels (from 22€ to 150€). For parcels exceeding the 150€ limit, duties must be paid. Parcels, coming from outside the EU, need to be cleared in the country of destination. Clearance at one single airport in Europe will no longer be possible.

Import–One–Stop–Shop (IOSS)

The European Union created the Import One-Stop-Shop (IOSS) for online sellers, electronic marketplaces, and electronic interfaces, to facilitate the import process for e-Commerce companies. When using IOSS, you can report and pay VAT for all imports into the EU on a single portal in an EU state where you have an intermediary or an establishment.

With IOSS, all your parcels can be imported to one central location, regardless if they are sold to a consignee in France, Germany, or anywhere else in the EU. In this way, you avoid delays when doing customs clearance and extra logistic costs. You can ship parcels with the IOSS VAT system if:

• The value of the parcels is below, or exactly 150€
• You are registered with an IOSS VAT number
• You have an intermediary or establishment in the European Union
• Your parcels are not subject to excise duties, such as tobacco or beer tax.

How can heyworld support you?

Working with several logistics companies and forwarding agencies can take up a lot of time and money. In addition, customs matters require a high level of expertise.

We at heyworld can take care of all communication to customs and simplify your information transfer. Moreover, we offer a customs clearance solution for IOSS and non-IOSS customers, for those who import parcels into Germany. Furthermore, we can offer customs solutions for parcels with a value above 150€. Our core business is not just the facilitation of customs clearance but also offering an end-to-end service.

We can pick up your shipments at a warehouse, transfer them to the nearest airport, carry out export processing and declaration, and the flight transfer to the destination airport. Finally, we take care of import customs clearance and the transfer to the last mile provider, or your destination warehouse. We provide our transport management system, which means taking care of the entire data transfer in the supply chain without any paperwork. All for your cross-border eCommerce strategy to find a perfect partner.

Some useful links:

• If you need detailed information, this link from the European Union can be helpful: https://ec.europa.eu/taxation_customs/business/vat/ioss_en.
• If you are interested in registering with IOSS, here is the link for the registration in Germany: https://www.elster.de/bportal/start?locale=en_US.

Say Hey! to us.

If you are interested in our service and want to have further talks about IOSS, or how heyworld solutions work, contact us at sales@heyworld.com. We would be delighted to contribute to your continued success in cross-border eCommerce.

Give us a virtual H(ey)nshake: www.linkedin.com/company/heyworld-gmbh