SlideShare a Scribd company logo
1 of 16
Download to read offline
VAT and Customs Duties on
Crossborder E-commerce Sales
Alan M. Rhode
ECOMMERCE +SHOP TECH
Helsinki, 14 March 2018
Ecommerce export
VAT vs.
Sales tax
E-SHOP
2
Customs duties
Packaging
tariffs
VAT vs. Sales Tax
• Most world countries apply consumption taxes on e-
commerce sales (B2C).
• Europe: VAT, applied in each country according to a
EU-harmonized framework.
• U.S., Canada e other non-EU countries: Sales Taxes.
• In general, Sales Taxes only apply to B2C sales and
at lower rates than VAT.
3
VAT
• The VAT scenario for e-commerce sales (B2C):
1. Shipment + delivery to Finland= Finnish VAT;
2. Shipment from Finland to another EU state=
distance selling (see slide nr. 5);
3. Shipment from Finland to non-EU countries= VAT
zero rated in Finland, as long as the merchant is
able to prove that the goods have left the EU.
Customs duties or consumption tax are often due
in the non-EU destination country.
4
EU Distance selling
• “EU Distance selling” means: sales of goods from the
EU to consumers in another EU country, but only when
the shipment of the goods is made under the name
and/or on behalf of the seller.
• EU distance selling does not include those cases when:
a. Shipment is made on behalf of the consumer; or
b. The customer collects the items personally or
arranges the collection; or
c. It is a business-to-business transaction; or
d. The products are delivered outside the EU.
5
EU distance selling (2)
• Distance sales of goods from Finland to another EU
country are subject to Finnish VAT as long as the
merchant does not exceed the yearly revenue threshold
set by the EU state of destination.
• The revenue thresholds vary among EU states (€35k
/100k).
• Once the threshold is met, the Finnish merchant must
apply/report/pay VAT on the sales in the EU country of
destination (EU 2) for the remaining part of that calendar
year (Y1) and the entire following year (Y2).
6
EU distance selling (3)
• If during Y2, the Finnish merchant fails to meet the
yearly revenue threshold in EU 2, from Y3 the merchant
will start applying Finnish VAT again.
• The merchant is allowed to opt for the application of
another EU state’s VAT on distance sales to the latter
EU state.
• The option enables the Finnish merchant not to
constantly monitor revenues made with sales to the
other EU country and to avoid switching back and forth
from Finnish VAT to the other EU country’s VAT.
7
EU distance selling (4)
• Example:
Germany: distance selling VAT threshold: Eur 100,000
per year
✓ In 2018, a Finnish merchant never reaches the Eur
100,000 threshold with sales to German consumers:
the merchant will continue applying Finnish VAT to all
sales to German consumers (24%);
✓ On the contrary, if during 2018 our Finnish merchant
reaches the Eur 100,000 threshold, the merchant will
have to apply German VAT to all B2C sales for the
remainder of 2018 and all 2019 (19%);
8
EU distance selling (5)
✓ If in 2019 (or a subsequent year), the Finnish merchant
does not reach the German threshold again (Eur 100k),
from 2020 the merchant will start applying Finnish VAT
on all German B2C sales;
✓ Alternatively, the Finnish merchant will be able to opt for
the application of German VAT (even if not mandated by
law).
9
EU distance selling today: issues
a) The merchant is required to constantly monitor EU
crossborder sales;
b) Potential VAT identification in multiple EU states;
c) In the latter case, the merchants must abide to multiple
invoicing and book-keeping requirements;
d) Potential audits by other EU tax authorities.
10
The 2021 VAT reform
• In 2017, the EU approved a reform overturning the VAT
treatment of distance sales.
• From 1 January 2021, VAT will always apply in the EU
country where the consumer receives the goods.
• The current thresholds will be removed (€35/100k).
• Facilitation: merchants will use the Mini One Stop Shop
(MOSS) to report/pay VAT in other EU states.
• The MOSS is an electronic interface used for to report
and pay VAT on crossborder supplies of B2C digital
services since 2015.
11
The 2021 VAT reform (2)
• Invoicing and book keeping rules of the home country of
the merchant will also apply to consumer sales to other
EU countries.
• De minimis threshold: sales by merchants with an yearly
EU turnover ≤ €10,000 will still be subject to VAT in the
country of dispatch.
12
Customs duties
• No outbound duties are due in Europe on exports.
• Shipments may be subject to inbound import duties in
the non-EU country of destination.
• Customs duties are usually applied on the commercial
value indicated on the accompanying invoice.
• Cost Insurance Freight (CIF) vs. Free On Board (FOB).
13
Customs duties: DDP vs. DDU
• EU merchants many ship parcels to non-EU consumers
under a Delivery Duty Paid (DDP) or, alternatively,
Delivery Duty Unpaid (DDU) solution.
• DDU: the customer will get contacted by the local
customs and mayhave to settle all import duties in order
for customs to release the shipment.
• DDP: the merchant decides to be responsible for paying
the duties. Most likely, the seller includes these duties at
checkout and collects payment from the customer in
advance. The courier will act as the customs broker.
14
Customs duties: free trade agreements
• If the EU and the non-EU destination country have
entered into a Free Trade Agreement, no inbound
customs duties will apply if the products originate from
Europe.
• The rules of origin included in the FTA will determine
whether a product originates from Europe.
• Inbound VAT or Sales Taxes will still apply (=domestic
transactions).
15
Packagin tariffs/Green dot
• Most EU countries impose to non-established merchant
the payment of packaging tariffs on the packaging
used to deliver parcels to local consumers (Green dot).
• In many cases, registration with the competent national
recovery organization and payment of packagin tariffs is
required without any minimum packaging threshold
requirement (Austria, France, Germany, Spain).
• Merchants are usually allowed refund of the packaging
tariffs paid in their own country on packaging used to
export products.
16

More Related Content

What's hot

Seminarie e commerce 2011 presentatie international
Seminarie e commerce 2011 presentatie internationalSeminarie e commerce 2011 presentatie international
Seminarie e commerce 2011 presentatie international
Bart Van Den Brande
 

What's hot (20)

Fiscal representation, customs and vat from a sales perspective
Fiscal representation, customs and vat from a sales perspectiveFiscal representation, customs and vat from a sales perspective
Fiscal representation, customs and vat from a sales perspective
 
Manage your taxes
Manage your taxesManage your taxes
Manage your taxes
 
Brexit – Are You Ready – a Legal Checklist
Brexit – Are You Ready – a Legal ChecklistBrexit – Are You Ready – a Legal Checklist
Brexit – Are You Ready – a Legal Checklist
 
Customs and taxes, dealing with trade compliance in cross-border e-commerce
Customs and taxes, dealing with trade compliance in cross-border e-commerce Customs and taxes, dealing with trade compliance in cross-border e-commerce
Customs and taxes, dealing with trade compliance in cross-border e-commerce
 
KRESTON VAT NEWS December 2017
KRESTON VAT NEWS December 2017KRESTON VAT NEWS December 2017
KRESTON VAT NEWS December 2017
 
Changes in the EU VAT System Affecting eCommerce
Changes in the EU VAT System  Affecting eCommerceChanges in the EU VAT System  Affecting eCommerce
Changes in the EU VAT System Affecting eCommerce
 
No Deal to New Deals - Institute of Export and International Trade
No Deal to New Deals - Institute of Export and International TradeNo Deal to New Deals - Institute of Export and International Trade
No Deal to New Deals - Institute of Export and International Trade
 
The Impact of Brexit: Risks, Solutions and Opportunities for your Business
The Impact of Brexit: Risks, Solutions and Opportunities for your BusinessThe Impact of Brexit: Risks, Solutions and Opportunities for your Business
The Impact of Brexit: Risks, Solutions and Opportunities for your Business
 
VAT compliance for online sellers in the EU: key risks and solutions - Dr. Mo...
VAT compliance for online sellers in the EU: key risks and solutions - Dr. Mo...VAT compliance for online sellers in the EU: key risks and solutions - Dr. Mo...
VAT compliance for online sellers in the EU: key risks and solutions - Dr. Mo...
 
What is VAT? - Introduction - MFFA Belastingadvies | Tax Advice
What is VAT? - Introduction - MFFA Belastingadvies | Tax AdviceWhat is VAT? - Introduction - MFFA Belastingadvies | Tax Advice
What is VAT? - Introduction - MFFA Belastingadvies | Tax Advice
 
We Will VAT You
We Will VAT YouWe Will VAT You
We Will VAT You
 
Seminarie e commerce 2011 presentatie international
Seminarie e commerce 2011 presentatie internationalSeminarie e commerce 2011 presentatie international
Seminarie e commerce 2011 presentatie international
 
ING en Fortis mogen geld Europese Commissie beheren
ING en Fortis mogen geld Europese Commissie beherenING en Fortis mogen geld Europese Commissie beheren
ING en Fortis mogen geld Europese Commissie beheren
 
Filmpjes voor Europees parlement mogen 7,2 miljoen euro kosten
Filmpjes voor Europees parlement mogen 7,2 miljoen euro kostenFilmpjes voor Europees parlement mogen 7,2 miljoen euro kosten
Filmpjes voor Europees parlement mogen 7,2 miljoen euro kosten
 
Europees parlement vertrouwt eigen waterfonteintjes niet
Europees parlement vertrouwt eigen waterfonteintjes nietEuropees parlement vertrouwt eigen waterfonteintjes niet
Europees parlement vertrouwt eigen waterfonteintjes niet
 
AleksandraKowalik (10)
AleksandraKowalik (10)AleksandraKowalik (10)
AleksandraKowalik (10)
 
Legally Sound in 2019 - Update on Legal Changes in E-Commerce: Martin Hahn (H...
Legally Sound in 2019 - Update on Legal Changes in E-Commerce: Martin Hahn (H...Legally Sound in 2019 - Update on Legal Changes in E-Commerce: Martin Hahn (H...
Legally Sound in 2019 - Update on Legal Changes in E-Commerce: Martin Hahn (H...
 
Carol Lynch BDO Brexit Oct 2020
Carol Lynch BDO Brexit Oct 2020Carol Lynch BDO Brexit Oct 2020
Carol Lynch BDO Brexit Oct 2020
 
2017.05.24 eksporto klubas_jk
2017.05.24 eksporto klubas_jk2017.05.24 eksporto klubas_jk
2017.05.24 eksporto klubas_jk
 
Leger tekent miljoenencontract met Boondoggle
Leger tekent miljoenencontract met BoondoggleLeger tekent miljoenencontract met Boondoggle
Leger tekent miljoenencontract met Boondoggle
 

Similar to VAT and Custom Duties on Crossborder Ecommerce Sales

Vat and cross border retailing ukti external nov 14 (2)
Vat and cross border retailing ukti external nov 14 (2)Vat and cross border retailing ukti external nov 14 (2)
Vat and cross border retailing ukti external nov 14 (2)
taxadvicedirect
 

Similar to VAT and Custom Duties on Crossborder Ecommerce Sales (20)

Brexitbrexit sauce.pptx
Brexitbrexit sauce.pptxBrexitbrexit sauce.pptx
Brexitbrexit sauce.pptx
 
VAT + imports exports in a post Brexit UK
VAT + imports exports in a post Brexit UKVAT + imports exports in a post Brexit UK
VAT + imports exports in a post Brexit UK
 
European Value Added Tax - Introduction
European Value Added Tax - IntroductionEuropean Value Added Tax - Introduction
European Value Added Tax - Introduction
 
Get Ready for Brexit
Get Ready for BrexitGet Ready for Brexit
Get Ready for Brexit
 
Taxation
TaxationTaxation
Taxation
 
EU Fiscal Representation Services vis our Antwerp port office
EU Fiscal Representation Services vis our Antwerp port officeEU Fiscal Representation Services vis our Antwerp port office
EU Fiscal Representation Services vis our Antwerp port office
 
Direct taxation in Germany
Direct taxation in GermanyDirect taxation in Germany
Direct taxation in Germany
 
Vat and cross border retailing ukti external nov 14 (2)
Vat and cross border retailing ukti external nov 14 (2)Vat and cross border retailing ukti external nov 14 (2)
Vat and cross border retailing ukti external nov 14 (2)
 
Brexit Indirect Tax Impact Analysis
Brexit Indirect Tax Impact AnalysisBrexit Indirect Tax Impact Analysis
Brexit Indirect Tax Impact Analysis
 
Changes in the EU VAT System Affecting eCommerce
Changes in the EU VAT System Affecting eCommerceChanges in the EU VAT System Affecting eCommerce
Changes in the EU VAT System Affecting eCommerce
 
Briefing Paper: More EU VAT changes
Briefing Paper: More EU VAT changesBriefing Paper: More EU VAT changes
Briefing Paper: More EU VAT changes
 
International Indirect Tax Update - March 2016
International Indirect Tax Update - March 2016International Indirect Tax Update - March 2016
International Indirect Tax Update - March 2016
 
Import and Export laws for UK
Import and Export laws for UKImport and Export laws for UK
Import and Export laws for UK
 
International Indirect Tax survival in a global supply chain
International Indirect Tax survival in a global supply chain International Indirect Tax survival in a global supply chain
International Indirect Tax survival in a global supply chain
 
Clever Currency Management & VAT
Clever Currency Management & VATClever Currency Management & VAT
Clever Currency Management & VAT
 
Ukti vat exports masterclass
Ukti vat exports masterclassUkti vat exports masterclass
Ukti vat exports masterclass
 
vat
vatvat
vat
 
20150410.kpmg.doingbusinessinpoland law-tax- logistics ekli
20150410.kpmg.doingbusinessinpoland law-tax- logistics ekli20150410.kpmg.doingbusinessinpoland law-tax- logistics ekli
20150410.kpmg.doingbusinessinpoland law-tax- logistics ekli
 
Briefing Paper: Mini One-Stop-Shop
Briefing Paper: Mini One-Stop-ShopBriefing Paper: Mini One-Stop-Shop
Briefing Paper: Mini One-Stop-Shop
 
Economics of Brexit
Economics of BrexitEconomics of Brexit
Economics of Brexit
 

More from Verkkoteollisuus | Ecommerce Finland

More from Verkkoteollisuus | Ecommerce Finland (18)

Introducing the German Ecommerce Market
Introducing the German Ecommerce MarketIntroducing the German Ecommerce Market
Introducing the German Ecommerce Market
 
Jukka Sippola: Kaupankäynti ja maksaminen virtuaalitodellisuudessa - kivijalk...
Jukka Sippola: Kaupankäynti ja maksaminen virtuaalitodellisuudessa - kivijalk...Jukka Sippola: Kaupankäynti ja maksaminen virtuaalitodellisuudessa - kivijalk...
Jukka Sippola: Kaupankäynti ja maksaminen virtuaalitodellisuudessa - kivijalk...
 
Olli Kiuru: PSD2 - maksupalveluiden murros
Olli Kiuru: PSD2 - maksupalveluiden murrosOlli Kiuru: PSD2 - maksupalveluiden murros
Olli Kiuru: PSD2 - maksupalveluiden murros
 
Marja Merentie: Verkosta ostaminen ja ostokäyttäytyminen
Marja Merentie: Verkosta ostaminen ja ostokäyttäytyminenMarja Merentie: Verkosta ostaminen ja ostokäyttäytyminen
Marja Merentie: Verkosta ostaminen ja ostokäyttäytyminen
 
Uskalla kansainvälistyä digitoimija
Uskalla kansainvälistyä digitoimijaUskalla kansainvälistyä digitoimija
Uskalla kansainvälistyä digitoimija
 
Vaisalan kasvutarina
Vaisalan kasvutarinaVaisalan kasvutarina
Vaisalan kasvutarina
 
Vainun kasvutarina
Vainun kasvutarinaVainun kasvutarina
Vainun kasvutarina
 
Relexin kasvutarina
Relexin kasvutarinaRelexin kasvutarina
Relexin kasvutarina
 
Edututor Oy:n kasvutarina
Edututor Oy:n kasvutarinaEdututor Oy:n kasvutarina
Edututor Oy:n kasvutarina
 
LeadDeskin kasvutarina
LeadDeskin kasvutarinaLeadDeskin kasvutarina
LeadDeskin kasvutarina
 
Differon kasvutarina
Differon kasvutarinaDifferon kasvutarina
Differon kasvutarina
 
Boomerang distribution ou
Boomerang distribution ouBoomerang distribution ou
Boomerang distribution ou
 
Pakipoint prese for verkkoteollisuus 2016 01-28
Pakipoint prese for verkkoteollisuus 2016 01-28Pakipoint prese for verkkoteollisuus 2016 01-28
Pakipoint prese for verkkoteollisuus 2016 01-28
 
Going global from small country
Going global from small countryGoing global from small country
Going global from small country
 
Ecommerce europe - e-regulations update
Ecommerce europe - e-regulations updateEcommerce europe - e-regulations update
Ecommerce europe - e-regulations update
 
Verkkoliiketoiminnan trendit ja tarpeet
Verkkoliiketoiminnan trendit ja tarpeetVerkkoliiketoiminnan trendit ja tarpeet
Verkkoliiketoiminnan trendit ja tarpeet
 
Philipp Lück - Factor Returns in German E-Commerce
Philipp Lück - Factor Returns in German E-CommercePhilipp Lück - Factor Returns in German E-Commerce
Philipp Lück - Factor Returns in German E-Commerce
 
Kaupan digitalisaation trendit
Kaupan digitalisaation trenditKaupan digitalisaation trendit
Kaupan digitalisaation trendit
 

Recently uploaded

一比一原版(TUOS毕业证书)谢菲尔德大学毕业证成绩单原件一模一样
一比一原版(TUOS毕业证书)谢菲尔德大学毕业证成绩单原件一模一样一比一原版(TUOS毕业证书)谢菲尔德大学毕业证成绩单原件一模一样
一比一原版(TUOS毕业证书)谢菲尔德大学毕业证成绩单原件一模一样
mefyqyn
 
买(rice毕业证书)莱斯大学毕业证本科文凭证书原版质量
买(rice毕业证书)莱斯大学毕业证本科文凭证书原版质量买(rice毕业证书)莱斯大学毕业证本科文凭证书原版质量
买(rice毕业证书)莱斯大学毕业证本科文凭证书原版质量
acyefsa
 
一比一原版(Indiana State毕业证书)印第安纳州立大学毕业证成绩单原件一模一样
一比一原版(Indiana State毕业证书)印第安纳州立大学毕业证成绩单原件一模一样一比一原版(Indiana State毕业证书)印第安纳州立大学毕业证成绩单原件一模一样
一比一原版(Indiana State毕业证书)印第安纳州立大学毕业证成绩单原件一模一样
mefyqyn
 
一比一原版(ASU毕业证书)亚利桑那州立大学毕业证成绩单原件一模一样
一比一原版(ASU毕业证书)亚利桑那州立大学毕业证成绩单原件一模一样一比一原版(ASU毕业证书)亚利桑那州立大学毕业证成绩单原件一模一样
一比一原版(ASU毕业证书)亚利桑那州立大学毕业证成绩单原件一模一样
mefyqyn
 
一比一原版(UOL毕业证书)利物浦大学毕业证成绩单原件一模一样
一比一原版(UOL毕业证书)利物浦大学毕业证成绩单原件一模一样一比一原版(UOL毕业证书)利物浦大学毕业证成绩单原件一模一样
一比一原版(UOL毕业证书)利物浦大学毕业证成绩单原件一模一样
mefyqyn
 
Termination of Employees under the Labor Code.pptx
Termination of Employees under the Labor Code.pptxTermination of Employees under the Labor Code.pptx
Termination of Employees under the Labor Code.pptx
BrV
 

Recently uploaded (20)

Embed-3-2.pdfkp[k[odk[odk[d[ok[d[pkdkdkl
Embed-3-2.pdfkp[k[odk[odk[d[ok[d[pkdkdklEmbed-3-2.pdfkp[k[odk[odk[d[ok[d[pkdkdkl
Embed-3-2.pdfkp[k[odk[odk[d[ok[d[pkdkdkl
 
一比一原版(TUOS毕业证书)谢菲尔德大学毕业证成绩单原件一模一样
一比一原版(TUOS毕业证书)谢菲尔德大学毕业证成绩单原件一模一样一比一原版(TUOS毕业证书)谢菲尔德大学毕业证成绩单原件一模一样
一比一原版(TUOS毕业证书)谢菲尔德大学毕业证成绩单原件一模一样
 
HOW LAW FIRMS CAN SUPPORT MILITARY DIVORCE CASES
HOW LAW FIRMS CAN SUPPORT MILITARY DIVORCE CASESHOW LAW FIRMS CAN SUPPORT MILITARY DIVORCE CASES
HOW LAW FIRMS CAN SUPPORT MILITARY DIVORCE CASES
 
Embed-6 (1).pdfc p;p;kdk[odk[drskpokpopo
Embed-6 (1).pdfc p;p;kdk[odk[drskpokpopoEmbed-6 (1).pdfc p;p;kdk[odk[drskpokpopo
Embed-6 (1).pdfc p;p;kdk[odk[drskpokpopo
 
买(rice毕业证书)莱斯大学毕业证本科文凭证书原版质量
买(rice毕业证书)莱斯大学毕业证本科文凭证书原版质量买(rice毕业证书)莱斯大学毕业证本科文凭证书原版质量
买(rice毕业证书)莱斯大学毕业证本科文凭证书原版质量
 
Law of succession-Notes for students studying law
Law of succession-Notes for students studying lawLaw of succession-Notes for students studying law
Law of succession-Notes for students studying law
 
Embed-2-2.pdf[[app[r[prf[-rk;lme;[ed[prp[
Embed-2-2.pdf[[app[r[prf[-rk;lme;[ed[prp[Embed-2-2.pdf[[app[r[prf[-rk;lme;[ed[prp[
Embed-2-2.pdf[[app[r[prf[-rk;lme;[ed[prp[
 
Bad Spaniel's Consumer Survey on the Use of Disclaimers
Bad Spaniel's Consumer Survey on the Use of DisclaimersBad Spaniel's Consumer Survey on the Use of Disclaimers
Bad Spaniel's Consumer Survey on the Use of Disclaimers
 
ORane M Cornish affidavit statement for New Britain court proving Wentworth'...
ORane M Cornish affidavit statement  for New Britain court proving Wentworth'...ORane M Cornish affidavit statement  for New Britain court proving Wentworth'...
ORane M Cornish affidavit statement for New Britain court proving Wentworth'...
 
Trial by media Do media trials serve aby purpose
Trial by media Do media trials serve aby purposeTrial by media Do media trials serve aby purpose
Trial by media Do media trials serve aby purpose
 
TTD - PPT on social stock exchange.pptx Presentation
TTD - PPT on social stock exchange.pptx PresentationTTD - PPT on social stock exchange.pptx Presentation
TTD - PPT on social stock exchange.pptx Presentation
 
Comprehensive Guide on Drafting Directors' Report and its ROC Compliances und...
Comprehensive Guide on Drafting Directors' Report and its ROC Compliances und...Comprehensive Guide on Drafting Directors' Report and its ROC Compliances und...
Comprehensive Guide on Drafting Directors' Report and its ROC Compliances und...
 
一比一原版(Indiana State毕业证书)印第安纳州立大学毕业证成绩单原件一模一样
一比一原版(Indiana State毕业证书)印第安纳州立大学毕业证成绩单原件一模一样一比一原版(Indiana State毕业证书)印第安纳州立大学毕业证成绩单原件一模一样
一比一原版(Indiana State毕业证书)印第安纳州立大学毕业证成绩单原件一模一样
 
Respondent Moot Memorial including Charges and Argument Advanced.docx
Respondent Moot Memorial including Charges and Argument Advanced.docxRespondent Moot Memorial including Charges and Argument Advanced.docx
Respondent Moot Memorial including Charges and Argument Advanced.docx
 
Trending Topics in ITC Litigation with Knobbe Martens
Trending Topics in ITC Litigation with Knobbe MartensTrending Topics in ITC Litigation with Knobbe Martens
Trending Topics in ITC Litigation with Knobbe Martens
 
一比一原版(ASU毕业证书)亚利桑那州立大学毕业证成绩单原件一模一样
一比一原版(ASU毕业证书)亚利桑那州立大学毕业证成绩单原件一模一样一比一原版(ASU毕业证书)亚利桑那州立大学毕业证成绩单原件一模一样
一比一原版(ASU毕业证书)亚利桑那州立大学毕业证成绩单原件一模一样
 
Embed-1-1.pdfohediooieoiehohoiefoloeohefoi
Embed-1-1.pdfohediooieoiehohoiefoloeohefoiEmbed-1-1.pdfohediooieoiehohoiefoloeohefoi
Embed-1-1.pdfohediooieoiehohoiefoloeohefoi
 
一比一原版(UOL毕业证书)利物浦大学毕业证成绩单原件一模一样
一比一原版(UOL毕业证书)利物浦大学毕业证成绩单原件一模一样一比一原版(UOL毕业证书)利物浦大学毕业证成绩单原件一模一样
一比一原版(UOL毕业证书)利物浦大学毕业证成绩单原件一模一样
 
How Can an Attorney Help With My Car Accident Claim?
How Can an Attorney Help With My Car Accident Claim?How Can an Attorney Help With My Car Accident Claim?
How Can an Attorney Help With My Car Accident Claim?
 
Termination of Employees under the Labor Code.pptx
Termination of Employees under the Labor Code.pptxTermination of Employees under the Labor Code.pptx
Termination of Employees under the Labor Code.pptx
 

VAT and Custom Duties on Crossborder Ecommerce Sales

  • 1. VAT and Customs Duties on Crossborder E-commerce Sales Alan M. Rhode ECOMMERCE +SHOP TECH Helsinki, 14 March 2018
  • 2. Ecommerce export VAT vs. Sales tax E-SHOP 2 Customs duties Packaging tariffs
  • 3. VAT vs. Sales Tax • Most world countries apply consumption taxes on e- commerce sales (B2C). • Europe: VAT, applied in each country according to a EU-harmonized framework. • U.S., Canada e other non-EU countries: Sales Taxes. • In general, Sales Taxes only apply to B2C sales and at lower rates than VAT. 3
  • 4. VAT • The VAT scenario for e-commerce sales (B2C): 1. Shipment + delivery to Finland= Finnish VAT; 2. Shipment from Finland to another EU state= distance selling (see slide nr. 5); 3. Shipment from Finland to non-EU countries= VAT zero rated in Finland, as long as the merchant is able to prove that the goods have left the EU. Customs duties or consumption tax are often due in the non-EU destination country. 4
  • 5. EU Distance selling • “EU Distance selling” means: sales of goods from the EU to consumers in another EU country, but only when the shipment of the goods is made under the name and/or on behalf of the seller. • EU distance selling does not include those cases when: a. Shipment is made on behalf of the consumer; or b. The customer collects the items personally or arranges the collection; or c. It is a business-to-business transaction; or d. The products are delivered outside the EU. 5
  • 6. EU distance selling (2) • Distance sales of goods from Finland to another EU country are subject to Finnish VAT as long as the merchant does not exceed the yearly revenue threshold set by the EU state of destination. • The revenue thresholds vary among EU states (€35k /100k). • Once the threshold is met, the Finnish merchant must apply/report/pay VAT on the sales in the EU country of destination (EU 2) for the remaining part of that calendar year (Y1) and the entire following year (Y2). 6
  • 7. EU distance selling (3) • If during Y2, the Finnish merchant fails to meet the yearly revenue threshold in EU 2, from Y3 the merchant will start applying Finnish VAT again. • The merchant is allowed to opt for the application of another EU state’s VAT on distance sales to the latter EU state. • The option enables the Finnish merchant not to constantly monitor revenues made with sales to the other EU country and to avoid switching back and forth from Finnish VAT to the other EU country’s VAT. 7
  • 8. EU distance selling (4) • Example: Germany: distance selling VAT threshold: Eur 100,000 per year ✓ In 2018, a Finnish merchant never reaches the Eur 100,000 threshold with sales to German consumers: the merchant will continue applying Finnish VAT to all sales to German consumers (24%); ✓ On the contrary, if during 2018 our Finnish merchant reaches the Eur 100,000 threshold, the merchant will have to apply German VAT to all B2C sales for the remainder of 2018 and all 2019 (19%); 8
  • 9. EU distance selling (5) ✓ If in 2019 (or a subsequent year), the Finnish merchant does not reach the German threshold again (Eur 100k), from 2020 the merchant will start applying Finnish VAT on all German B2C sales; ✓ Alternatively, the Finnish merchant will be able to opt for the application of German VAT (even if not mandated by law). 9
  • 10. EU distance selling today: issues a) The merchant is required to constantly monitor EU crossborder sales; b) Potential VAT identification in multiple EU states; c) In the latter case, the merchants must abide to multiple invoicing and book-keeping requirements; d) Potential audits by other EU tax authorities. 10
  • 11. The 2021 VAT reform • In 2017, the EU approved a reform overturning the VAT treatment of distance sales. • From 1 January 2021, VAT will always apply in the EU country where the consumer receives the goods. • The current thresholds will be removed (€35/100k). • Facilitation: merchants will use the Mini One Stop Shop (MOSS) to report/pay VAT in other EU states. • The MOSS is an electronic interface used for to report and pay VAT on crossborder supplies of B2C digital services since 2015. 11
  • 12. The 2021 VAT reform (2) • Invoicing and book keeping rules of the home country of the merchant will also apply to consumer sales to other EU countries. • De minimis threshold: sales by merchants with an yearly EU turnover ≤ €10,000 will still be subject to VAT in the country of dispatch. 12
  • 13. Customs duties • No outbound duties are due in Europe on exports. • Shipments may be subject to inbound import duties in the non-EU country of destination. • Customs duties are usually applied on the commercial value indicated on the accompanying invoice. • Cost Insurance Freight (CIF) vs. Free On Board (FOB). 13
  • 14. Customs duties: DDP vs. DDU • EU merchants many ship parcels to non-EU consumers under a Delivery Duty Paid (DDP) or, alternatively, Delivery Duty Unpaid (DDU) solution. • DDU: the customer will get contacted by the local customs and mayhave to settle all import duties in order for customs to release the shipment. • DDP: the merchant decides to be responsible for paying the duties. Most likely, the seller includes these duties at checkout and collects payment from the customer in advance. The courier will act as the customs broker. 14
  • 15. Customs duties: free trade agreements • If the EU and the non-EU destination country have entered into a Free Trade Agreement, no inbound customs duties will apply if the products originate from Europe. • The rules of origin included in the FTA will determine whether a product originates from Europe. • Inbound VAT or Sales Taxes will still apply (=domestic transactions). 15
  • 16. Packagin tariffs/Green dot • Most EU countries impose to non-established merchant the payment of packaging tariffs on the packaging used to deliver parcels to local consumers (Green dot). • In many cases, registration with the competent national recovery organization and payment of packagin tariffs is required without any minimum packaging threshold requirement (Austria, France, Germany, Spain). • Merchants are usually allowed refund of the packaging tariffs paid in their own country on packaging used to export products. 16