General

The EU’s new value-added tax law is officially implemented. How can Chinese sellers and e-commerce platforms send mail to the EU quickly and in compliance? What needs attention? How to declare VAT specifically?

VAT collection rules changes

The EU VAT regulations change this time for B2C item-type mail from non-EU sources. There are two important changes that need to be understood.

It can be seen that the value of the original goods is less than (or equal to) 22 euros and the exemption of VAT policy is cancelled, that is, all goods imported into the EU are subject to VAT.

It should be noted that when the value of the goods is less than (or equal to) 150 euros, the tax payer is the sender.

Sellers (sellers or e-commerce platforms) in non-EU countries need to register a VAT identification account (such as IOSS code, etc.) in any EU member state to declare and pay taxes incurred in all EU member states at once.

How to pay VAT

For B2C items sent from mainland China to EU member states, the payment method of VAT varies according to the value of the contents.

For items entering the European Union that have an internal value (total) exceeding 150 Euros, or although the internals value (total) does not exceed 150 Euros but are subject to consumption tax, VAT declarations still need to be made in accordance with the traditional process;

For items entering the European Union that have an internal value (total) of no more than 150 euros and do not need to pay consumption tax, the declaration process from July 1, 2021 is as follows:

1. When the seller or the platform sells, make sure to show the buyer the amount of VAT that should be paid to the EU at the latest when the ordering process is completed, and collect the corresponding VAT from the buyer. The tax rate standard of VAT complies with the tax rate standard of the EU member states where the buyer is located.

2. The seller or the platform provides the post with the information required for customs clearance in the EU, including the VAT identification account number (such as IOSS code, etc., which the seller or the platform provides based on the results of their actual registration, hereinafter referred to as "VAT identification account number") and HS Code.

3. The seller or the platform submits the VAT electronic declaration form through the portal website of the registered VAT identification account according to the requirements at the time of registration, and pays the corresponding VAT amount.

4. Keep the sales records of the completed declaration for at least 10 years. Cross-border e-commerce platforms can uniformly register VAT identification accounts and collect VAT on their behalf, or sellers can register and complete tax declaration and payment by themselves. At present, for B2C item-type mail entering the EU, neither China Post nor China Post provides VAT collection and payment services.

How to register a VAT identification account

The European Union has launched One Stop Shop (OSS), a one-stop VAT declaration service. You can log in to the following website and select the EU member states you need to register.

https://ec.europa.eu/taxation_customs/business/vat/vat-e-commerce_en

Note that only one EU member state can be selected to register a VAT identification account. After success, the tax payment in all EU member states can be declared and paid in one go.

China Post related requirements

Under the EU VAT New Deal, China Post has also changed its requirements for B2C item-type mail sent from mainland China to EU member states.

Starting from June 15, 2021, the China Post Agreement customer portal page has added the collection and verification functions of VAT-related information (including VAT payment methods and VAT identification account numbers). For mail sent from Mainland China to EU member states, customers need to choose the VAT tax payment method (import scheme/non-unionscheme/other) according to the actual situation, and fill in the corresponding VAT identification account number. If the tax payment method is other, the VAT identification account is empty by default.

Currently, China Post's system does not perform mandatory verification of HS Code for the time being. If any EU member states update the HS Code requirements, China Post will promptly notify customers and update the verification rules in the system simultaneously.

Taking into account that some platforms have different requirements for filling in VAT-related information for shipments using offline channels, China Post will add corresponding information items and system rules on the agreed customer portal page according to the requirements of the platform. Please fill in truthfully according to the requirements of the platform. .

If the order comes from the AliExpress platform, when placing an order on the customer portal page of the agreement, you need to select the platform logo of the order as "AliExpress" and enter the main order number provided by the platform. AliExpress will automatically push the VAT identification account number For China Post, sellers do not need to enter VAT tax payment methods and VAT identification account numbers.

Hit the point! The more detailed the information is prepared, the faster the speed will be~

common problem

Q1. How to judge whether the email is B2C or C2C?

China Post does not make judgments on the types of mail of customers. EU Customs will make judgments based on the data it holds. If you are an agreement customer registered with China Post, we recommend that you follow the VAT policy for B2C items.

Q2. Can the post office collect and pay VAT on behalf of it?

China Post and the postal services of EU member states currently do not provide the service of collecting and paying VAT on their behalf.

Q3. How to declare and pay VAT?

Please log in to the following URL: https://ec.europa.eu/taxation_customs/business/vat/vat-e-commerce_en

Choose any EU member state to register, get a VAT identification account, and follow the guidelines on the website to declare and pay taxes. Or declare through a third-party agent.

Q4. What are the consequences if VAT is not declared and paid?

For items with a total value of more than 150 euros, or items with a total value of less than 150 euros but subject to consumption tax, the seller or the platform does not need to declare VAT in advance. When the mail arrives at the EU customs, the customs will notify the recipient to pay as required Tax and release.

For items whose total value of internal parts does not exceed 150 Euros and does not need to pay consumption tax, if the seller or the e-commerce platform does not declare VAT, the mail will not be able to pass through the fast customs clearance channel when it arrives at EU customs, and the customs may notify the recipient to pay VAT again , The recipient also needs to bear other costs that may be incurred. If the customs cannot contact the recipient, the mail will be returned by the postal post after the customs has been detained for a period of time.

Q5. How does the customs judge whether the mailed items have received VAT?

The mailing post will submit the VAT identification account number to the mailing customs through the electronic advance customs information. The EU Customs will check the validity of the VAT identification account to determine whether the item has been paid for VAT. So please make sure to provide accurate VAT identification account number to China Post.

Q6. What happens if the VAT identification account is not transmitted through the forecast customs information?

For mails that do not need to declare VAT in advance (such as items with a total internal value of more than 150 euros, or items with a total internal value of less than 150 euros but subject to consumption tax), originally there is no requirement to transmit VAT identification accounts through electronic forecast information. When the mail arrives at EU customs, the customs will notify the recipient to pay taxes and release as required.

For mails that need to declare VAT in advance (such as items with a total value of not more than 150 euros and do not need to pay consumption tax), regardless of whether the seller or the e-commerce platform has registered and declared VAT, as long as the VAT identification account is not transmitted through the electronic warning, When the mail arrives at EU customs, the customs will notify the recipient to pay the tax. Compared with the emails that accurately provide the VAT identification account as required, the efficiency of customs clearance will be affected.

Q7. What should I do if I am taxed a second time when I arrive at EU customs?

As long as the customer provides China Post with accurate electronic forecast customs information and VAT-related information as required, China Post will ensure that these information are successfully sent to the destination post. Therefore, it is very important to strictly comply with our information and data requirements. Any item of the electronic warning gateway information that does not meet the requirements will result in the failure of the electronic warning gateway information transmission. In the case that China Post has successfully transmitted the electronic warning information, if the mail is still taxed a second time, you can appeal to the European Union.

Q8. Are there any other related expenses for being taxed twice?

There may be other expenses borne by the recipient, and different EU member states have different regulations on the specific amount of these expenses.

Q9. When will the EU's VAT New Deal be implemented?

At present, the member states of the European Union have not yet required a unified effective node for the mail to which the New Deal applies. In order to ensure your interests, China Post will be ready to receive and transmit your VAT related information on June 15, 2021. You can send us this information once you are ready. If any member states of the European Union have updated the specific effective nodes of the mail applicable to the New Deal, China Post will inform you of the relevant information in a timely manner.

Q10. What if the recipient's phone number and e-mail are not provided?

If the mail has been remitted by the seller or the platform by VAT, the failure to provide the recipient's email address and phone number will not affect customs clearance, but will affect the postal processing time limit to a certain extent. If the VAT is not remitted, the lack of email address and phone number will result in customs not being able to contact the recipient and unable to pay taxes, which will result in the return of the mail. Therefore, it is recommended that you fill in the electronic warning information sent to China Post completely, truthfully and accurately.

Source: EMS China Post Express Logistics