Definitions and main customs concepts 1.3.1. Intrinsic value
The new VAT rules for e-commerce have introduced special schemes for the calculation of the import VAT for goods in consignments not exceeding 150€. The applied concept followed the threshold of the customs duty exemption for consignments of negligible value under the Duty Relief Regulation (Regulation (EC) No 1186/2009 – ‘DRR’). Besides, as of July 2021, the Member States will need to integrate a validation mechanism in the declaration processing system (National Import Systems) to check whether the customs declaration for release for free circulation of certain low value consignments (the H7 dataset in UCC-DA Annex B) is legitimately applied. Considering all the above, the customs legislation introduced a legally binding definition for this term that safeguards the harmonised implementation throughout the EU and builds on the approach that has been used for the customs duty exemption threshold. This definition applies for the implementation of the 150€ threshold both for customs and VAT purposes, regardless of the VAT scheme used. Article 1(48) of the UCC-DA provides that “intrinsic value means:
(a) for commercial goods: the price of the goods themselves when sold for export to the customs territory of the Union, excluding transport and insurance costs, unless they are included in the price and not separately indicated on the invoice, and any other taxes and charges as ascertainable by the customs authorities from any relevant document(s);
(b) for goods of a non-commercial nature: the price which would have been paid for the goods themselves if they were sold for export to the customs territory of the Union;
Definitions and main customs concepts 1.3.1. Intrinsic value
The new VAT rules for e-commerce have introduced special schemes for the calculation of the import VAT for goods in consignments not exceeding 150€. The applied concept followed the threshold of the customs duty exemption for consignments of negligible value under the Duty Relief Regulation (Regulation (EC) No 1186/2009 – ‘DRR’). Besides, as of July 2021, the Member States will need to integrate a validation mechanism in the declaration processing system (National Import Systems) to check whether the customs declaration for release for free circulation of certain low value consignments (the H7 dataset in UCC-DA Annex B) is legitimately applied. Considering all the above, the customs legislation introduced a legally binding definition for this term that safeguards the harmonised implementation throughout the EU and builds on the approach that has been used for the customs duty exemption threshold. This definition applies for the implementation of the 150€ threshold both for customs and VAT purposes, regardless of the VAT scheme used. Article 1(48) of the UCC-DA provides that “intrinsic value means:
(a) for commercial goods: the price of the goods themselves when sold for export to the customs territory of the Union, excluding transport and insurance costs, unless they are included in the price and not separately indicated on the invoice, and any other taxes and charges as ascertainable by the customs authorities from any relevant document(s);
(b) for goods of a non-commercial nature: the price which would have been paid for the goods themselves if they were sold for export to the customs territory of the Union;
I’ve noticed that once the IOSS number went live on Shopify to collect VAT on orders upto €150, VAT has been charged on shipping rates regardless of whether the check box to charge tax on shipping rates is ticked. In fact from what I can see from orders I’ve had to the EU since I implemented this, Shopify has made the shipping price VAT inclusive and so I’m now not receiving the correct shipping revenue. Instead a portion of it is now VAT and as @Dbaca has clarified, VAT should not be added to shipping costs to the EU. So do I keep the VAT and not declare it anywhere, as Shopify shouldn’t have included it in the shipping rate?
we send sub 2kg parcels uk > eu and been told by our broker (aggregator) we cannot specify DDP without an IOSS number for international tracked mail. Whilst this doesn’t seem right to me, they insist that’s the status.
I would like to know this. We just had a German customer getting charged VAT on recipt of the parcel but itwas booked under IOSS. We have not uploaded the order into the cross border system though.
This is the only one we have had an issue with to date.
IOSS is not mandatory but there will be clearance fees when there is no IOSS present. DDP works but you need to have a way to pay it. A VAT entity. It sounds like you have an interesting service I am interested on how it works.
German post has had some issues. They are sometimes not following the IOSS process. I think it is just new to them so there are some errors. We are communicating with them and I think this will start to become the exception not the rule.
We are in the early days of IOSS. How things are being handled is playing itself out. I have been in Customs and Trade for 20 years. This is new and countries are getting use to it. The idea of a uniform law that raise the dutiable rate to €150 is a good thing for merchants. A uniform way to collect VAT without having to do multi-State reclamations is a good thing. Every carrier and clearance agent is learning right now. Intermediaries are seeing all the countries and shipments in bulk. We will continue to adjust to best practices as we get through the beginning of this change.
That the VAT taxable amount has not changed in not playing itself out. I really think that you should state - as the representative of an intermediary with clients reading this forum who may take your word as good advice - that you got that wrong. You confused intrinsic value with taxable amount. Own it.
