The new law from 2021. Cheap purchases from China will get more expensive due to VAT
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Shopping in China has become very popular because of the very cheap and great products. The most popular shops are Aliexpress, GearBest, eBay, DealExtreme. Popularity is so high that even postal service has failed to deliver packages. For some shoppers, Aliexpress has become almost a drug. But all this joy is likely to be jeopardized by the new VAT Change Act. The new law comes from European Union and it says that consumers will have to pay VAT on goods imported from outside the EU. This change will be apply in 2021.
New Act – abolishing the current VAT exemption in 2021
Each Member State in the European Union has a set amount of VAT. If the value of the ordered goods is up to 22 euros, you have been avoided paying VAT and controlling the customs. However, the EU has come up with new rules where you will have to pay VAT even for orders of less than 22 euros. This novelty should be valid from 2021 and applies to non-EU countries. At present, each Member State has to adjust the conditions for its country. How the conditions will look like is not known yet. But this change could make online shopping more expensive.
Longer delivery time
Another drawback of the new law would be to extend the delivery period of the goods. Imagine how many packages daily arrives in our country from China. And every one package will have to go to a customs check! There is a question of who will pay the customs control and how much will it cost? All the countries should incorporate this new law into their local law.
How to avoid paying customs duties and VAT?
- ordering from European warehouses – this is how, for example, currently works at GearBest or even some resellers at Aliexpress
- contact the seller to send the order as a private person with a cover letter that this is a gift
Chinese businesses will definitely try to figure out a way not to lose their customers. Perhaps we will see a new central warehouse even from Aliexpress. However, the situation is much more complicated than, for example, GearBest. Aliexpress is an intermediary for thousands of sellers who use Aliexpress portal for sale. But GearBest works as a single seller with its own stock and products. Let`s wait for our government and China sellers will do with this situation.
If you like something and want to avoid paying VAT, order your goods now.
If you want to read full text of the new law you can go directly on the European Union website.