Low value shipments: Customs specifies how to collect VAT for Marketplaces
What is a low value shipment?
According to European Regulation (EC) No 1186/2009, this is a consignment with an intrinsic value not exceeding 150 € total. These consignments may benefit from an exemption from import duties.
Until July 2021, consignments of less than 22 € were also exempt from VAT. But the entry into force of « VAT package » EuropeanOn 1 July 2021, this exemption was terminated in order to combat VAT fraud. From now on, only consignments between private individuals, without a commercial character, can still benefit from double exemption (customs duties and VAT).
The need to simplify customs clearance and VAT management for e-commerce flows is followed by:
– On customs clearance, the simplified electronic reporting H7 can be requested: it allows the goods to be declared according to a specific and simplified data set; This is the customs clearance method used by most express operators operating on Marketplace platforms to ensure smooth delivery.
- As regards VAT management, the IOSS system (Import One Stop Shop) and the simplified scheme allow the collection of VAT and secure its collection in each EU Member State. IOSS is, in a way, a one-stop shop at which companies can register in order to declare and pay in a single Member State VAT on distance sales for all their low-value consignments entering import. This option is particularly suitable for sales via the enabling platforms.
As a reminder, according to Article 14a of Directive 2006/112/EC, a facilitating platform is:
- An electronic interface,
- Who connects a supplier and a buyer,
- And which leads to a delivery of goods via this interface.
At European level, these platforms may choose to be liable for VAT, in particular if they are importing or using IOSS.
But in FranceThe scheme is stricter: Article 293A of the General Tax Code refers to any platform facilitating a sale as liable for VAT, irrespective of the value of the consignment or the method of declaration used (excluding specific cases in DROM and customs duties remaining payable by the customs importer of the goods)
All the reporting procedures are detailed in the administrative decision taken in BOD No 7579.
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