With the amendment of the tax legislation, from 1 July 2021, it is necessary to pay VAT on all goods imported from third countries, regardless of the value of the goods. Regarding the implementation of a new way of doing business related to e-commerce, we provide additional explanations.
Why can double VAT be charged?
In the case of the application of the special import regime IOSS , VAT is already paid to the seller at the time of purchase and only the customs formalities necessary for the release of the goods for free circulation in the Union are completed. The condition for the use of this arrangement is the registration of the seller (eg online platforms) in this special arrangement. Upon registration, he is assigned a special IOSS registration number, which is the basis for the application of this regime. The seller or. online platformit must ensure that the applicant for the customs declaration (usually the carrier of the postal item, eg national postal operator or express carrier) has an IOSS registration number, which must be presented to the customs authority in the customs declaration at the time of customs clearance. Such a system should ensure that the possibility of misuse of IOSS numbers is minimized (IOSS numbers are not intended for public disclosure and are a business secret). According to the tax legislation, the valid IOSS number of the supplier (seller) stated on the customs declaration is the basis for the exemption from VAT on import. In cases where the IOSS number is not indicated in the customs declaration, the customs authority cannot grant an exemption and charge VAT at the applicable tax rate, regardless of whether it has already been collected by the supplier.
Customs formalities must be completed upon import
We further clarify that the application of the IOSS special import regime is a tax simplification that does not affect the completion of customs formalities that must be completed in order for goods to be released for free circulation in the Union. According to European customs legislation, all consignments arriving from third countries must be presented to the customs authority as soon as they enter the customs territory of the Union and an electronic customs declaration is lodged for them. The carrier of the consignment, ie the national postal operator or the express carrier, is responsible for the presentation of items in postal traffic. The details of the consignment must be submitted with the customs declaration in electronic form. Related to this are the costs that customs agents charge their customers.
The customer can contact the online provider
Currently, in practice, there are cases when the buyer states that he paid VAT at the time of purchase, but at customs clearance the IOSS registration number was not stated on the customs declaration, due to which the condition for VAT exemption on import was not met and VAT was charged. In such cases, we advise customers to contact the online retailer or. platform and demand a refund of the VAT paid because it did not provide an IOSS number for customs purposes (some online merchants have the option of a VAT refund published on their websites). We propose that the application be accompanied by proof of payment of VAT on importation (invoice of the customs representative from which the payment of VAT is evident) and state that VAT had to be paid again for the consignment,
We further clarify that similar problems are faced by other Member States, which is also known to the European Commission, which is looking for appropriate solutions to the situation. We anticipate that the communication between online retailers and mail carriers will be regulated over time and that IOSS numbers will be duly communicated to customs information systems