Tech

EU tightens rules for international online trade

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The time has come on Amazon’s online marketplaces in Spain, France and Italy: China-based dealers already account for more than half of the 10,000 largest sellers, according to data from the New York market research firm Marketplace Pulse. But the Chinese retailers will soon also be in the majority on Amazon.de. According to the data, their share is currently 40 percent – in 2016 it was only 10 percent.


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One reason for the march of Chinese retailers is the fact that they supply European customers directly via platforms such as Amazon or AliExpress, without intermediaries who want to earn money. However, many providers are also so cheap because they use tax tricks and neglect product safety, as random samples – also from c’t – have shown time and again in recent years.

Amazon logistics center in Leipzig: The EU’s new market surveillance regulation also affects the shipping giant.

(Image: Amazon)

One of the more recent studies comes from the Danish Chamber of Commerce. Last year, they ordered 54 products in China – mainly toys and electronics – via Amazon, AliExpress and Wish. Of the 50 products that actually arrived in Denmark, 46 broke EU safety rules. In 16 cases, import sales tax would have been due, but in no single case was it paid because the sellers had cheated when specifying the value of the goods.

The unfair competition should soon be over: At the beginning of July, new EU tax rules for orders from non-European online retailers will come into force. The most important change is the elimination of the previous exemption limit of 22 euros for direct imports. This means that 19 percent import sales tax is due on all parcels. Because taxes below 1 euro are not levied, the new exemption limit is in fact 5.23 euros. In addition, retailers will in future have to fill out a customs declaration for all shipments.

The EU Commission expects a lot from the measures. The tax reform creates “fair competition between European and foreign e-commerce market participants”, writes the Brussels authority in a brochure. She expects additional tax revenue of seven billion euros per year.

In other words: for consumers, shopping in China is in many cases 19 percent more expensive. Depending on the merchant’s approach, the recipients may also have to pay a processing fee from the postal service provider. Ordering small items such as chargers or handicraft boards is hardly worthwhile in China (see box).

The elimination of the 22 euro exemption limit on July 1st affects all online purchases that are sent directly from non-EU countries such as China, the USA or Great Britain. For example, if you order a power bank in China for 15 euros via Ebay or AliExpress, you will pay 19 percent import sales tax on it in the future – i.e. 2.85 euros. The final invoice amount including any postage costs is decisive for the tax.

Normally, Deutsche Post pays this amount to customs when the consignment is imported and later collects it from the recipient when the consignment is handed over – at the front door or in the post office. For this service, Swiss Post charges an additional “flat-rate fee” of 6 euros. For the power bank, which is currently still available from China for 15 euros, you will therefore pay a total of 23.85 euros from July.

Gradually, more and more retailers are likely to switch to a new procedure that does not incur any flat-rate expenses. Sellers who register for the so-called Import One Stop Shop (IOSS) in an EU country and submit monthly tax returns are allowed to collect import sales tax directly from their European customers. Your consignments will then be waved through by customs if the declared value does not exceed 150 euros. In this case, you pay 17.85 euros for the exemplary power bank.

If the invoice amount is less than EUR 5.24, the shipment will remain tax-free even after July 1, because taxes below EUR 1 will not be charged.

All of this only applies if the parcel comes directly from China. This is especially the case with ultra-cheap platforms such as AliExpress or Wish. On Amazon.de you can also find many Chinese suppliers who bring their goods to Europe in pallets or containers and store them temporarily in Europe at Amazon.