In the article New EU law: What will change from 1.7.2021 and how to avoid high fees? we have informed you that from 1 July 2021, shipments up to 22 euros will also be taxed under the new law. The beginning of July is approaching and we bring you new information directly from the customs administration, how everything will go. If you want to save money, you have to make a customs declaration yourself. You will learn how to proceed in our article. Please note that each European country has its own customs clearance rules. Some countries have prepared a special application for their citizens so that VAT can be paid electronically.
What awaits us from 1.7.2021?
We would like to reassure you that the whole situation regarding the payment of VAT looks worse than it really should be. Aliexpress is already preparing for this situation in several ways, because it cannot afford the outflow of its customers. There are 4 variants as it could be. Officially, Aliexpress has not confirmed anything yet.
1. The first option is the most probable variant that will apply from 1.7.2021 is that we will pay VAT when creating an order directly on Aliexpress. Aliexpress can choose a representative throughout the EU who will pay VAT in advance for e-shops (the so-called single point of administration for imports – IOSS – Import One Stop Shop). This is a new system that will save us money on customs procedures. You will not pay anything extra.
2. The second option, which is already happening, is the creation of European warehouses. Whatever you order from European warehouses in the EU, not only will it come to you in about 7-10 days, but you will not have to pay anything extra or process anything. The prices of the goods are the same, you only pay higher postage.
3. Third option: From our own experience we can say that we order mainly from Chinese warehouses on the Aliexpress website and all packages have been coming from the Netherlands or Lithuania for the last month. Of the 25 packages ordered from Chinese warehouses, 17 came from the Netherlands and 8 from Lithuania. If this continues, and the package will arrive in this way after July 1, 2021, then the customs procedure will be skipped. You will not pay any added tax or postage fees, as these are packages within the EU.
4. The fourth option, which is less probable, is the payment of VAT to the customs office and fees to the Post. The customs office is preparing for the whole situation not only because of shipments from China, but also because of shipments from Great Britain, the USA and other countries outside the EU. Even so, Aliexpress remains by far the cheapest seller compared to local sellers who sell the same goods at several times higher prices.
What is eCeP – electronic customs declaration?
A new application of the customs administration of the Czech Republic, which you will have to use in the case of orders from third countries. The Customs Administration of the Czech Republic wanted to make the new process easier for citizens, and therefore developed this application. Not all member states have created such an application for their citizens. It is an electronic communication between the consignee and the customs administration. “The electronic application allows you to enter the data for the customs declaration in advance. Configure the customs declaration and submit it. The application will be launched on 1.7. 2021.” says one of the representatives of the customs administration at a press conference on 13.5.2021.
Contact the customs administration in your country to find out if you have an electronic customs declaration system. The neighboring country Slovakia also has the possibility of electronic customs declaration.
What you should prepare for self custum declaration?
2. Basic data for the shipment
- Kind of goods
- Weight of goods
- The value of goods and transportation
3. Classification of goods according to the code in the customs tariff
4. Electronic identification – there is several options for example use of e-citizen, chip or via bank identity, via identification number, my ID, electronic signature, via data box, e-government mobile key. If you do not have one of the services yet, we recommend that you set up one of the services as soon as possible.
5. VAT rate – each country has its own VAT, in the Czech Republic it is 21%, in Slovakia 20%, etc. But if it is a special product where is a reduced VAT rate is applied, then you must adjust the rate and provide the necessary information for these goods.
How do I complete a customs declaration and how much will it cost me?
There are two ways to complete the customs declaration after 1.7.2021. Again, each country has its own rules and fees. Below is an example of how this will happen in the Czech Republic and Slovakia. But given that this is the European Union, the procedure should be a bit similar.
- You will handle the customs declaration yourself – the customs administration has created a special application. If you make the customs declaration yourself, you will only pay additional VAT to the customs office, or a fee for depositing the consignment at the Czech Post. But only if the customs procedure is extended for some reason and lasts more than 15 days. The rate should be 0,4 EUR / day and max. 25 EUR.
- Someone will do it for you – you choose your representative, ie for example a postal carrier or a delivery service. The Czech Post charges such 4 EUR for such representation if you supply them with all the documents or 6 EUR if you do not cooperate them with the documents.
Examples of VAT and fee calculations from 1.7.2021
1. You have completed the electronic customs declaration yourself
- The price of the dress is 10 EUR + postage 1 EUR
- VAT calculation: 10 EUR + 1 EURO = 11 EUR
- The VAT rate is 20%, ie. 11 EUR * 0.20 = 2.2 EUR
- The total price of the dress, including all fees, will be: 10 EUR + 1 EURO + 2.2 EUR = 13.2 EUR
2. You were represented by post office or other carrier and you provided the documents
- The price of the dress is 10 EUR + postage 1 EUR
- Representation by post office costs 9 EUR
- VAT calculation: 10 EUR + 1 EURO + 9 EUR = 20 EUR
- The VAT rate is 20%, ie. 20 EUR * 0.20 = 4 EUR
- The total price of the dress, including all fees, will be: 10 EUR + 1 EURO + 9 EUR + 4 EUR = 24 EUR
If you submit the customs declaration using the eCeP application yourself, ie directly to the Customs Administration of the Czech Republic, then you do not pay any additional amounts. The customs administration does not charge anything for that. The application is provided free of charge and the customs procedure is performed by you, so there is nothing to pay for. The only thing you will pay the Customs Administration of the Czech Republic is the assessed VAT.
Who should I pay VAT to?
A) Directly to the customs office, if you have chosen the option of representing yourself by an electronic customs declaration
B) The entity that will represent you in the customs procedure (post office, DHL, UPS,…)
C) Directly on the e-shop where you buy the goods. The e-shop can choose a representative throughout the EU who will pay VAT for the e-shop (the so-called single administrative place for import – IOSS – Import One Stop Shop). If the goods are purchased in the mode of one administrative place – called IOSS (Import One Stop Shop), VAT will be paid directly on the e-shop. However, this facilitation will only concern the payment of VAT and not the customs declaration.
The customs declaration must always be lodged electronically in all these ways.
VAT is paid on the entire price of the shipment, including delivery costs. Payment of VAT will be possible by bank transfer. It will not be possible to pay via payment gateway and payment card in Czech republic yet.
When will the customs administration release the consignment to its consignee and what is the procedure?
The electronic customs declaration requires electronic communication with both the Czech Post and the consignee. The customs office shall release the consignment if:
- the goods are transported to the Czech Republic and are at the Czech Post,
- The Czech Post shall submit the consignment for customs clearance,
- the consignee lodges an electronic customs declaration,
- the customs administration verifies the data in the customs declaration, assesses value added tax and the recipient has to pay this debt.
- as soon as you pay the amount to the customs administration, the application informs you and also the Czech Post, which will then deliver the consignment to you.
How do I know where my shipment will come from?
It may have happened to you that you made an order for Aliexpress and you chose delivery from China, but in the end the goods arrived, for example, from the Netherlands. In this case, you do not have to pay VAT because the goods arrived from a warehouse in the EU. But you didn’t know that in advance. Therefore, it will probably be best to wait for the tracking number from the seller and see where the product will come from. Based on this, you decide whether to file an electronic customs declaration or not. And if you are not sure, it will probably be best to wait until you are contacted by the Czech Post or another carrier with the addition of data to the electronic customs declaration. Someone always contacts you.
How do I find out if my shipment belongs to the category up to 150 euros?
1. It depends on the value of the goods in the shipment. The value of the goods does not include the price for transport, even if the amount of VAT is then calculated from it. You pay the amount of VAT from the total price of the shipment, including transport.
Example: Goods worth 140 euros with postage for 20 euros are counted in the category up to 150 euros, even if the total amount paid when buying is 160 euros. However, VAT is calculated on the amount of 160 euros.
2. If it happens that you have several smaller shipments in one package and their total value exceeds 150 euros, you must follow the rules for shipments over 150 euros.
3. If the seller sent you the goods free of charge, for example only for the price of postage, you must quantify some value of the goods. Each product has its value, even if you received it for free. VAT will therefore be calculated on the fixed value and price of the postage you have paid.
Where can I find information on the new rules?
The Czech Customs Administration has prepared all information on the new website www.celnicka.cz.
We will be happy if you write us what process is set up in your country and how the customs declaration takes place. We believe that everything will not be so bad in the end and we will continue to enjoy shopping at Aliexpress.
We will look at the whole process of submitting an electronic customs declaration in the next article. Turn on notifications to our website so that you find out everything in time. If you have a question about this topic, write it down below the article in the comments.