One of the great advantages of online stores like AliExpress is the possibility of obtaining products from China and other countries at a very low cost, both due to the low price of the product itself and the lack of taxes.
Currently, it is not necessary to pay VAT on products imported from outside the European Union, as long as their value does not exceed 22 euros; that is the reason why we can find a gigantic variety of goods in this type of stores, with ridiculous prices like a few euro cents. It is even possible to buy electronic devices for less than 20 euros with ease.
It is these advantages that have made this type of store grow so easily.
Things will change on July 1, when the (Import One-Stop Shop) comes into force, a new portal for online stores that comes with new rules under its arm, including the end of the exception for payment of taxes.
From July 1, all goods imported into the European Union will be subject to VAT or equivalent tax in each country, regardless of their price. That will mean an immediate increase in consumer bills, especially if they have gotten used to buying low-priced products precisely to avoid VAT. This practice is more common than it seems, with communities on social networks and platforms like Telegram specializing in finding this type of ‘bargain’.
The measure affects all online businesses, but it will be especially notable for services like AliExpress, which base a large part of their offer on this type of low-priced products.
The AliExpress offer is based on products of 20 euros or less
In addition, as of July 1, these companies will be in charge of collecting, declaring, and paying VAT to the relevant authorities, not the user; That should translate into fewer ‘surprises’ when we buy something from China, since there should be no additional costs to those announced on the page. The IOSS will make the purchase process easier, with a single payment at the time of purchase.
An important detail is that purchases that exceed 150 euros do not fall within the IOSS, even if the order includes more than one product. In this case, the recipient of the package will have to pay taxes when it arrives in the member state. Therefore, a possible way to ‘skip’ this measure is to make a large purchase, but that defeats the purpose of these types of stores, which have specialized in selling a huge amount of goods at low prices. In addition, stores that use a third-party platform to sell to their customers, such as Amazon, are not affected because the platform itself is responsible for VAT.
It is too soon to know if this measure will substantially affect online sales, and how AliExpress and the rest of the stores can reinvent themselves in the face of this new scenario.
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