It is a huge marketplace, one of the largest in the world, and has an extensive and diverse catalogue. However, many users continue to see it as an eCommerce in which to find imported products, of Chinese origin, at (very often) almost ridiculous prices. However this could be about to change, as on July 1, among whose rules it is established that all imported products must pay VAT. Including the cheapest ones on Aliexpress.
The IOSS goes into effect on July 1.
The Import One-Stop Shop (IOSS) will enter into force on July 1, 2021, which implies a change in eCommerce obligations in relation to VAT on products imported into the EU. Thus, until now commercial goods whose value was lower than those 22 euros they were exempt from this tax… but that will change from next month.
So from this date all imported products must pay VAT or the equivalent tax in each country, regardless of the type of product or its price. Although from this date the companies will be in charge of collecting, declaring and paying VAT to the authorities, this change could imply an increase in consumer billsespecially for those who are used to bargains on Aliexpress and other types of marketplaces for low-priced products, a situation that platforms like Amazon will not experience since the marketplace itself is responsible for VAT.
All imported products must pay VAT
Of course, the intention behind the implementation of this new regulation is that there are fewer unpleasant surprises when purchasing products from China or from any other country, since There will be no hidden expenses, additional to those that the same page announces.
As the official website of the European Commission points out: «The IOSS facilitates the collection, reporting and payment of VAT for sellers who make distance sales of imported goods to buyers in the EU.” And although VAT was charged until now on lower-priced products, many sellers took advantage of the occasion to declare products below their value to cross the border without problems.
An important point to note is that those purchases that exceed 150 euros will not be considered within the IOSS, even in the case of orders with more than one product, and in this case Whoever receives the package must pay tax upon arrival in the member state.
Companies will need to register on the IOSS portal
And as in all regulations there is an exception to this new rule: gifts, which will be exempt from taxes if their value is less than 45 euros, however it will not be easy to evade taxes under this point since it will be necessary to show that it is a gift, and not a business transaction.
Companies in the IOSS portal of any EU Member Stateand if companies are not based within the Union, they will need to appoint an intermediary established in the EU to fulfill their VAT obligations under the IOSS.
The purpose of this measure is to avoid tax evasion that these imports have produced up to now, especially those that come from China that have attracted us so far, and the result remains to be seen, but It is not difficult to guess that the prices will have to be adjusted a little more to what is offered in most eCommerce today, and the competition will be a little fairer.
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