New EU directives designed to tackle VAT fraud and to promote cross-border business as well as customs safety and security measures will all impact your business this year. To continue trading as normal, and avoid any additional costs and surcharges, or delays at customs, e-tailers both in and outside of the European Union need to start preparing now.
So, what exactly is changing and when?
Import Control System 2 (ICS2) is a large-scale pre-arrival security and safety programme being implemented across the EU from March 15 2021.
Designed to make air transport safer and more efficient for everyone, ICS2 will require manufacturers and exporters to provide precise data concerning shipments prior to loading, as well as updating IT systems and training staff in compliance with the new system.
The VAT low value consignment relief (for consignments valued up to €22) is being scrapped, which will mean that all imports of small consignments from suppliers will be subject to VAT as of July 1, 2021. The changes to VAT will ensure EU-based sellers aren’t disadvantaged when dispatching goods within the EU and also prevent fraudsters under-declaring the value of their goods.
IOSS is the new, centralised system for paying and declaring VAT on goods imported into the EU as part of the abolition of VAT exemption. Low value (€150 or less) consignments of standard (not excise) goods will can be declared via the Import One Stop Shop (IOSS).
As well as changes to VAT, more detailed documents, such like CN22/23 or commercial invoice, will be required for all EU-bound shipments from July 1, 2021 providing accurate and in-depth information including shipper and recipient details, HS codes, goods value and description and more.
Online marketplaces must now pay and collect VAT on behalf of their sellers. The changes aim to streamline tax registration and help businesses comply with VAT whilst also ensuring the EU e-commerce market is fair for everyone involved.
These changes are designed to make the e-commerce market safer and fairer for both EU and non-EU sellers and may impact your customers’ journey, as they will now be required to pay VAT when receiving items valued at less than €22 as well as customs presentation fees.
To avoid any disruption to your e-commerce business, make sure you’re prepared and communicate any changes to your customers before they come into effect.
Checking for restrictions and licenses, registering with the relevant authorities and ensuring any necessary paperwork is in place prior to dispatching goods will help you avoid fines, delays and unhappy customers.
Asendia is working hard to develop seamless cross-border trading for our customers and we’ll be announcing new systems and solutions throughout the year to help e-commerce businesses adapt to the changes.
If you’re unsure about how the EU regulatory changes
will impact you, or for more guidance download our
Customs Changes 2021 Overview.