New EU customs regulations

Since July 1, 2021, new regulations relating to e-commerce are in force. All online purchases made outside the European Union are now subject to taxation, starting from the first euro.

Why did this customs reform come into effect?

E-commerce is increasing, and the current sanitary context has contributed very strongly to this development. In 2020, online commerce grew by 8.5% compared to 2019, this upward trend is confirmed for 2021. Fevad estimates the increase in online sales of +15% in the first quarter of 2021, with a "progression twice as fast as the market average".

With such a strong performance in the e-commerce sector, the EU wants to ensure a level playing field for all e-commerce players (EU and non-EU). The previous system benefited non-EU online sellers who could avoid being subject to VAT. This can be considered as unfair competition towards intra-EU sellers. Therefore, the application of this taxation aims to no longer penalize EU e-traders and thus adopt a fairer system.

Thanks to this new taxation, the European Commission estimates that "more than €5 billion of VAT could be collected in the EU on these transactions that have escaped taxation until now. In France, up to 450 million parcels sent each year will have to be declared to customs and taxed" according to the French Customs and Excise Department.

To summarize, these customs regulations were put in place to :

Facilitate customs formalities for intra-EU companies
Limit tax evasion by non-EU companies
Establish a fairer system between companies

E-merchant: what's changed

You sell and ship from the EU:

The current VAT regime on distance sales of goods is simplified. A single tax threshold is set at €10,000. Above this threshold, VAT is declared and paid in the Member State of consumption.

You sell and ship outside the EU:

You sell goods worth less than 150 euros: via the one-stop shop at the import of your country, the tax can be collected by you, or can be directly paid by the buyer who will be redirected to this platform when buying
You sell goods worth more than 150 euros: the VAT will have to be declared to customs electronically, and the formalities will be carried out by the carrier acting on behalf of the online buyer.

Consumer: what's changed

When you are purchasing online, we invite you to check if the seller's website sells its products all taxes included (TTC), in this case, there will be no impact on your purchases.

If you buy on a website (outside the EU) that sells products without tax, it means that the seller does not apply this VAT at the time of sale, you will have to pay this VAT upon receipt of your purchase, and this, from 1 euro of purchase. In this case, the carrier may ask you to pay this VAT, but you may also be subject to additional management fees to cover the completion of customs formalities by the carrier.

Are you located in the French overseas departments? Goods under 22 euros are exempt from VAT.

NB: this VAT also applies to the United Kingdom which is no longer part of the European Union since January 1st 2021.

Information to keep in mind:

In general, this taxation was not put in place to penalize e-tailers or consumers, but to rebalance the competition between intra-EU and non-EU online sellers and to limit tax fraud.

For professionals outside the EU: make sure you are in good standing on your customs formalities in order to guarantee a positive buying experience for your customers and avoid unpleasant surprises when receiving their purchases.
For private individuals: make sure you check whether your purchases are inclusive of tax or exclusive of tax in order to anticipate possible taxation when you receive your package. The VAT is to be paid either at the time of your purchase, or at the reception of your parcel with the carrier.

Need help or specific support? Our support teams are here to help you: you can contact them via this form. If you need more specific assistance with customs formalities, we also invite you to contact your customs authorities directly.

Enjoy your shipment!