This article focuses on the import of e-commerce goods from countries outside the EU. First, the goods that fall under e-commerce are discussed. Then, the role of the platform is described. Subsequently, customs clearance and VAT clearance are addressed.
What falls under e-commerce?
The term e-commerce simply means electronic commerce. We are therefore talking about goods that are traded via the internet. This involves goods that are delivered from third countries to 'consumers', also known as distance sales. Often, delivery takes place via a platform. The seller delivers the goods to the consumer in the member state of destination.
From a VAT perspective, the intervention of a platform is not strictly necessary for distance sales. The supply of goods from a member state to a private individual already qualifies as a distance sale, regardless of whether a platform plays a role in the sale.
Platforms as deemed supplier
Entrepreneurs who facilitate distance sales via electronic interfaces, such as marketplaces or platforms, are involved in the levying of VAT. Under certain conditions, platforms are considered 'deemed suppliers'. This means that these platforms must pay the VAT themselves. This concerns two situations, namely:
- Facilitating distance sales via an electronic interface for goods with a value of up to EUR 150 that have been imported and are sent from third countries.
- Facilitating the sale of goods from a warehouse within the EU, while the supplier is established outside the EU. Note: the EUR 150 limit does not apply here.
In both cases, the platform is deemed to have received the goods from the supplier and then delivered them to the 'consumer'. The platform pays the VAT.
Customs clearance
For all goods from third countries that are brought into the free circulation of the European Union, a declaration must be submitted. This also applies to e-commerce, even if no import duties are due.
Exemption
For consignments with an intrinsic value of less than EUR 150, there is an exemption from import duties. This exemption can only be claimed in the member state of destination. This means that if goods arrive in Belgium but are destined for a private individual in the Netherlands, an import declaration can only be made in the Netherlands if the exemption is applied. An exception to this is when goods are declared under the so-called import scheme. When that is the case, the declaration may be submitted in the member state of arrival.
Method of declaration
E-commerce shipments can be declared in various ways. In the Netherlands, the reduced dataset in DECO and the full dataset in DMS are available for submitting the declaration. DECO can only be used for goods without prohibitions or restrictions with an intrinsic value of less than EUR 150. All e-commerce goods can be declared in DMS. Applying the import scheme is not possible in DMS.
VAT in distance sales
VAT is collected in various ways for distance sales. The following describes the normal procedure, the special arrangement, and the import scheme. The special arrangement and import scheme are not mandatory. It is therefore possible to declare goods using the normal procedure.
Normal procedure
When using the normal procedure, VAT on import is paid at the time the goods are brought into free circulation. If desired, use can be made of the so-called postponement arrangement. Based on this arrangement, the VAT due on import is postponed to the periodic VAT return.
If goods are imported under the normal procedure and then supplied to the Dutch consumer, there is a domestic supply. If the supply takes place to a consumer established in another member state, there is an intra-Community distance sale.
As described above, if a company decides to declare the goods with the application of an exemption from import duties, the import must take place in the country of destination, i.e. the country where the consumer receives the products.
Special arrangement
When using the so-called 'special arrangement', there is indeed an initial application of the normal procedure, but it is possible to opt for a monthly postponement of payment of the VAT due. Under the current regulations in the Netherlands, there is already a possibility to submit a request for postponement of payment. This possibility is now explicitly included for VAT and loses its previous optional character for member states.
Certain entrepreneurs – generally postal and courier companies – can collect VAT on import from the person for whom the goods are intended on the basis of the special arrangement. The declaration is made monthly. This prevents companies from having to pay VAT on import 'at the border' immediately. The arrangement has various conditions and only applies to goods with a value of up to EUR 150. Even when this arrangement is applied, it is required that the import takes place in the country of destination.
In fact, in this case there is no question of a delivery including import duties and VAT. The private individual pays the import duties and VAT to the postal company himself.
Import scheme
To prevent an entrepreneur from having to register for VAT in 27 member states, a so-called one stop shop (IOSS, or import one stop shop) has been introduced. Registration in one member state is then sufficient.
This means, for example, that VAT is only declared in the Netherlands, while the goods go to other EU member states. In that case, the Netherlands collects and distributes the VAT due to the relevant member states of destination.
The import scheme can only be used for goods with an intrinsic value of less than EUR 150. Goods with a higher value can only be declared under the normal procedure.
When applying the import scheme, VAT on import is exempt. Only the supply to the consumer is therefore subject to VAT.
Conclusion
If your company trades in e-commerce goods, you will have to choose how you pay import duties and VAT. Do you want to know more? Please do not hesitate to contact us. We will be happy to help you further.