Will cheap shopping from China end in 2021? We figured out how it would all work for the new

If you get used to shopping from Chinese e-shops, you have certainly already captured information about the amendment to the Customs Procedure Act, which will regulate the conditions for the import of goods from countries that do not belong to the European Union. We're talking about changes already we also informed, but this time we have new information that reveals more details. Will cheap shopping from China end or not?

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We obtained the latest information directly at the Customs and Excise Department of the Financial Administration of the Slovak Republic.

What conditions have been true so far and when will it change?

At present, all imported products from countries outside the European Union that do not exceed the value of € 150 are exempt from duty. This applies with a few exceptions, such as alcoholic beverages, perfumes and tobacco products.

If the value of the shipment exceeds €150, VAT must be paid in addition to the customs duty. Imported goods with a value of up to 22 € is currently exempt from customs duty and VAT. If we summarize it briefly, the following currently applies:

• shipment by 22 € – without fees
• from 22 € to 150 € – the buyer pays VAT
• over 150 € – the buyer pays VAT and customs duty

But that will change already 1. July 2021when the new rules enter into force. These were supposed to be valid from January, but due to the coronavirus pandemic, the validity was postponed 6 months later.

New rules coming into force

According to the new rules concerning imports from the so-called third countries, shoppers will be must clear all consignments, ie also those with a value of up to 22 €. There will be an obligation to pay VAT even for cheap products for a few euros. This news took everyone by surprise and concern. So will cheap purchases from Aliexpress end in a few cents?

If you ever ordered something that exceeded the € 22 threshold, you received a letter inviting you to prove your true value, along with a power of attorney, thanks to which Slovenská pošta (or another carrier) could represent you in the process of filing a customs declaration.

However, it was not completely free, so in addition to VAT, he also had to pay a fee, which is in the case of the post office currently at € 9. In the end, he paid 20% VAT + a fee of € 9. If you had to pay such a fee together with VAT for every order, even up to € 22, it would certainly discourage you from buying from China.

The European Union is making changes in order to remove the current advantage for Chinese sellers and other countries outside the EU that do not pay tax in our country. Local retailers are at a disadvantage in this respect, as they have increased costs. The new rules will apply to all countries of the European Union, not only Slovakia.

How will it work after the new one?

As we did not find any specific information on how this will happen anywhere, we turned directly to the Financial Administration of the Slovak Republic. Will cheap shopping from China end? We received an answer from Lt. Col. Ing. Dany Michalicova z support centers for customs and excise duties. In the e-mail, she gave us details about how the shipments will be cleared from the summer of this year.

As we mentioned above, a customs declaration will need to be submitted for all shipments. For those that do not exceed the value of 150 € a simplified customs declaration will be available. They will not be customs dutyd as standard shipments over €150, as they are not subject to customs duty.

You pay VAT already at the time of purchase

If a supplier (seller) from a third country is registered by the tax authorities in a Member State and is assigned a unique VAT identification number - iOSS (import one stop shop), then such a registered supplier will charge VAT when purchasing to the consumer.

This means that Chinese e-shops can register for the purpose of paying tax in one of the European countries (it does not have to be the Slovak Republic). When buying from such an e-shop you pay VAT already when paying for the order on the e-shop website. Just as it now works when shopping, for example, from Slovak stores. The price will therefore already include VAT.

We assume that the largest shopping portal Aliexpress will be registered for VAT in one of the member countries, as the most cheap purchases take place through this portal. The average value of a purchase on Aliexpress for the year was $ 20-30.

We have not yet confirmed whether the second largest and best-known e-shop will also be registered in this way Banggood. We are actively communicating with them about this and will certainly bring you updates as soon as we receive them.

 

However, in order to identify such a purchase, an electronic customs declaration will need to be lodged stating the valid iOSS number of the supplier (seller). In such a case, the goods will be automatically released for free circulation after verification of the data in the customs declaration. You will then provide the carrier with a Movement reference number (MRN).

But it will increase the obligation to complete an electronic customs declaration via a short online form. After submitting it, you will receive an MRN number, which you will forward to the carrier, who will deliver the consignment free of charge after verifying the status of the proceedings, as you have already paid the VAT with the order.

What if the seller is not registered in the EU?

If the seller is not registered for VAT in iOSS in a Member State, VAT will be paid directly at the customs procedure after the customs declaration has been lodged with the customs authorities. If you do not want to be represented in the customs procedure and submit the customs declaration electronically, after receiving the submitted customs declaration for goods purchased from an unregistered seller (if the goods are not selected for inspection), you will be sent the necessary data for payment by electronic message in the IS system CEP.

For e-shops that will not be registered for VAT in the EU, the completion of the online customs declaration form will also include the obligation to pay VAT. It will be paid by transfer to the account of the state treasury. Immediately after confirming and pairing the payment, the shipment will be delivered to you. However, we will have to send the carrier the MRN identification number again, with which he will be able to verify the status of the customs declaration.

The low value shipment form should be simple and time consuming to complete. The process is already being tested and a guide will be available to guide you through the entire form using questions. Based on the answers and completion of the data, this guide will fill in the form itself, automatically.

What will you need to complete the customs declaration when purchasing from an unregistered seller?

You can fill in the customs declaration yourself, or leave it, for example, to the post office (the mentioned fee of € 9 is currently charged here). It is questionable whether the post office will not increase this fee from 1 July. If you want to avoid it completely, you can complete the customs declaration yourself.

To file a customs declaration without authorizing someone to represent you in customs proceedings, you will need:

1. have a qualified electronic signature (KEP), BOK code, KEP PIN, contact card reader and have software installed on the computer (so-called signature components)

2. registration in the information system Central electronic folder IS CEP

You can create a qualified electronic signature and register in the IS CEP Central Electronic Folder system even now. You need an ID card with a chip and a card reader.

If you already own these things, you can easily create an electronic signature according to the clear instructions on the page slovensko.sk. You will also get the necessary software, BOK code and KEP PIN, which are used to log in to the system and use an electronic signature.

The registration form for the information system The central electronic folder of the IS CEP is available below on this page.

The Financial Administration of the Slovak Republic issued on 28.4.2021 press release, in which it informs about the preparation of a new portal for filing customs declarations for low value consignments. If you now register in the IS CEP Central Electronic Folder system, your account will be automatically migrated to the new portal, where you will no longer have to register.

What remains unchanged?

Don't forget the European warehouses, which have recently gained in popularity. Of these, delivery will always be without any additional obligations or fees. Be sure to read our article on how to search products from european warehouses on aliexpresse.

You probably haven't known this before: How to search for products on AliExpress in European warehouses?

Because items in EU warehouses are already in Europe, from where they will be sent to you, new changes from 1.7.2021 they do not apply to them. Goods that you order from any European warehouse at any retailer will always be delivered to you without additional fees or formalities. You will not have to file a customs declaration or pay VAT.

He will still be here popular EU transport Priority Line, which guarantees free delivery. This method of transport is mainly offered by the e-shop Banggood. Likewise, this method of delivery remains in effect, without any change. Shipments that are sent in this way are already cleared by the seller himself for you, which you may not have even known about.

That is why you can see in the package tracking that such shipments first go to Germany, the Netherlands or another European country, from where they are then sent to Slovakia free of charge. You can continue to order phones, cameras or any products from Chinese warehouses without worry if you choose EU shipping Priority Line. Even after July 1.7.2021, XNUMX, there will still be no fees or additional bureaucracy.

So what will cheap purchases from China look like after 1.7.2021?

Some changes will come, but it will still be possible to buy relatively cheaply from Aliexpress and similar sites. For example, if you order a protective glass for a smartphone display and a cover or case, you will pay, in addition to the current price, VAT of 20%. However, with cheap products for a few euros, this will not mean a significant increase in price.

However, it will increase obligation to complete a customs declarationBut that should be easy and fast. Of course, it will be easier with sellers who register in Europe. We estimate that large e-shops, such as Aliexpress, will be registered, as a large part of their customers come from Europe.

Cheap purchases from China will definitely not end and you will still be able to order various products at better prices than with us. As soon as the new conditions come into force, we will test the entire process of filling in the customs declaration and share our experience in an article on our website. We will prepare detailed instructions so that you can fill in such a statement as well.

Be sure to join as well to our Facebook group, where we regularly publish our experience with purchases from China, test new sellers and bring the latest discount coupons, thanks to which you will save significantly.

We also send up-to-date information on customs duties, VAT, purchases from China and new coupons by e-mail. 👇