On the reform from the European Union workshop for cheap purchases from China, resp. from third countries, we already have you on our website informed several times. AliExpress, as the largest online marketplace, has had to adapt to the reform and provides information on new tax obligations.
Cheap orders from China are still used by a large number of people and therefore the current fear of ordering something from China is understandable. However, we bring more light to this problem.
AliExpress has confirmed VAT on all products
China's largest Internet marketplace, AliExpress, has circulated an official statement on tax reform for packages imported into Europe. The biggest change is cancellation of the exemption for packages up to 22 €for which so far she did not have to pay tax and were not even stopped at customs. We therefore avoided 20% VAT and also the fee for the customs procedure of Slovenská pošta.
After the new one, it will therefore be necessary to pay VAT on all packages, because the EU wants to "balance fairness" between local trade and imports.
It has been confirmed that AliExpress will be increase the prices of products by VAT and therefore the payment of VAT will take place directly when ordering on their website. It will not have to be dealt with additionally in the customs procedure.
If you can't find the answer to one of your questions in our article, click on the questions and answers section from AliExpress dedicated to the new customs rules.
Since when do the new VAT rules start?
Changes to AliExpress will apply from 1.7.2021, when EU reform comes into force. All orders from this date will therefore be subject to the new rules.
What if I ordered before July 1?
If you managed to order products before July 1, 2021, you will not be affected by any price increase within AliExpress. But the package can be stopped at customs, because now the arrival of the package in our territory is taken into account, not the date of the order. We explain everything in this article.
How will VAT payment work on AliExpress?
As we mentioned, after the new one we will have to pay extra VAT, for products of every value. The amount of tax varies from country to country (in the Slovak Republic it is 20 %), which is taken into account by AliExpress itself. The price of the product will therefore be increased by the VAT of the given country and AliExpress will take care of collecting VAT, it does not matter the value of the product, if we are talking about delivery to countries within the EU. Also if the seller is registered outside the EU. You can see other cases in the picture below.
In the case of a seller registered in the EU, he will be in charge of collecting VAT on delivery to a country within the EU. But there are a minimum of such sellers in the AliExpress market and almost all of them are registered in Hong Kong or directly in China.
The VAT item, ie VAT, is displayed on AliExpress in the cart. You will find it just below the amount for transport.
Item You will see VAT (ie VAT) in the basket in the first step of the order. It will be displayed exactly where the shipping costs are, or a discount with a coupon from the seller.
You will be able to get too invoice each of your new orders. You will get to them in your profile in the list of orders and each time you will see a button Download invoice.
How will the payment of customs duties work?
Exemption from customs duties for products up to 150 € does not change. Thus, up to this value, only VAT is paid and you are exempt from duty. But you have to take into account the fee when processing the customs procedure, because the product will be safely stopped at customs. We write about this in our new article, where you will also find new fees from Slovenská pošta. The sad news is that the fee is even if you handle the customs procedure yourself, without the authorization of the post office.
The exemption from customs duties for goods up to € 150 remains unchanged. These rules remain the same as before.
The amount of duty differs from the type of product, from VAT, from transport and the like. Therefore, to calculate the exact amount of the duty, use this calculator.
What if I order a product from an EU warehouse on AliExpress?
We originally had information that purchases from EU warehouses will not increase on AliExpress. However, after launching the new rules, we found that the item VAT is added in the basket and for products from EU warehouses. At the moment, we do not have information on whether you will have to increase in addition to this, ie paying customs duties (if the package is over 150 €) or the need to handle the customs procedure, which is also charged. More in the article on Slovak Post fees.
Unfortunately, VAT is also added to AliExpress for products in European warehouses.
As the AliExpress platform is registered in Hong Kong and is a country outside the European Union, they are obliged to collect VAT on goods supplied to customers in the EU, including cases of delivery from warehouses outside the EU up to € 150 or if the goods are delivered from warehouses within EU.
The collection of VAT even at EU warehouses is caused by the country in which AliExpress is registered as a platform. They operate in Hong Kong, outside the EU, and are forced to levy VAT on all goods.
What about packages that are marked as a gift?
Some smarter shoppers on AliExpress used it often gift tag package. They thus avoided paying VAT on packages more expensive than € 22. In this way, it was possible to avoid overpricing the order from China, except for packages that were randomly inspected. One of the maneuvers of the European Union is the introduction of the new customs control system ICS2 (Import Control System 2).
A detailed description of the packages and their contents will be needed to ensure a smooth customs procedure. This will also apply to packages marked as a gift. The description must be accompanied by the HS code (Harmonized System), which is an international standard for the classification of goods.
More worries about the new reform
The new reform from the EU therefore brings a lot of unpleasant worries for the end user, and the goal is clear - to discourage shopping from China and promote local trade. But whether this is the right step will show time, and we are very curious about how customs will be prosecuted by a much larger influx of packages. For the last month / two, they have had great difficulty handling customs procedures within a reasonable time.
But at least in this way, AliExpress helps make it easier to pay VAT. We will certainly test the traffic with the new rules and we will also publish detailed instructions on how to arrange the customs procedure yourself. However, keep in mind that you will need a civilian with a chip, a reader and all the necessary certificates on your computer.