Imports of goods from countries outside the European Union (especially from China) have had an exponential increase in recent years, thanks to the explosion of e-commerce and the very low prices offered by oriental marketplaces (for example Aliexpress and Alibaba).
To facilitate customs clearance processes, current EU regulations provide for an exemption from VAT and duties under 22 euros in value of goods, with almost no shipment being held at customs for verification (proof of payment).
Often sellers declare a lower value of the goods than the real one (even 90%) in order to stay under the 22 Euro threshold and not to make the customer pay taxes.
This practice is also used in B2B shipments, where the importer often asks the supplier to indicate in the CI (Custom Invoice) a goods value lower than the real one.
If the customs asks for proof of payment, a self-declaration or a written agreement with the supplier indicating payment on delivery is sufficient (because the Chinese get paid after shipping, of course!).
The consequences of this system are obvious: failure to collect taxes by the state, unfair competition with sellers in the old continent. The European Union, faced with what has become a huge flaw (I use the term flaw because it is to all intents and purposes), ran for cover with a new legislation and a new customs clearance system.
From 15th march we start with the first phase of the program, considerably increasing the controls on imports from non-EU countries.
This new system is called ICS2 (Import Control System 2) and should increase the safety of shipments to Europe through new control procedures and information sharing between the member states of the European Union.
Thanks to ICS2, European customs will be able to identify high-risk shipments more easily and will intervene more quickly to ensure safe transit of goods.
To avoid customs controls, most imports contain vague and imprecise descriptions of the goods. In shipments to retail buyers it is quite common to find terms such as "gift", "spare parts" and "sample" in the description of the goods, inserting a value of a few Euros (instead of the real purchase price).
From 15th march, all of this will no longer be possible. In fact, with the new ICS2 system, shippers are forced to accurately describe the goods inside the packages using the Entry Summary Declaration and the unique HS code which identifies (globally) each type of goods.
In this first phase, European couriers and postal operators will be affected, but also third-country postal operators who ship to Europe.
From 1 March 2023, this new system will also apply to all other postal operators, air and express carriers and international freight forwarders. On 1 March 2024 it will be the turn of shipments by sea and rivers, by rail and by road.
From 1st July 2021 there will be no more "tax free" thresholds. You will have to pay VAT and duties on any import from China and extra UE countries, even on shipments with a value of less than 22 Euros.
The only exemption foreseen will be for shipments under 150 Euros of declared value, in these cases only VAT will have to be paid. The costs of customs clearance will probably remain present, it is not yet clear if they will suffer price increases by the shippers.
This last change was scheduled for January 2021. However, to give Member States time to adapt to the new provisions, there was an extension of six months. This is why the new legislation will come into effect from 1st July 2021.
With these innovations, buying goods from non-European countries will become less convenient only for B2C. Eastern marketplaces will probably adapt by including customs duties in the purchase price (as eBay did for the USA, Canada and Australia).
In this way it will become difficult to circumvent the rule and the "crafty" will have to put their souls in peace and pay what is really due.
B2B imports (legal supplies) should not be affected. This new system could be an additional weapon to combat both tax evasion and the illegal trade in counterfeit and dangerous products.
For more information, you can consult the source of the article on the official website of the European Union.
Importing from China in this period requires more and more organization in order to contain costs and delivery times. Relying on on-site structures is essential to be able to overcome all the unforeseen and critical issues that this last period has reserved for us.
Tools like Noziroh Hub are the key to importing products from China and managing production processes successfully. With a single tool it is possible to manage all the procurement phases, from the research of the supplier to the production, from the storage of the goods to the shipment from China.
Their team of experts also follows customers in the delicate stages of importing and customs clearance of goods, communicating in English, Chinese and Italian. The company is located in Italy and has a branch in China from which they can store goods from suppliers, check them and then send them to the customer in one go.
Author: Alessandro Ave
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