Why it will be more expensive to buy in online stores like AliExpress from July

The Import One-Stop Shop (IOSS) will enter into force on July 1, 2021 applying a change in the obligations of electronic commerce with the VAT of imported products. The advantage that these purchases enjoyed until now comes to an end.

Until now, it was not necessary to pay VAT for the import of commercial goods whose value was less than 22 euros. This will change in the next month. The European Union argues that this measure transfers the obligations to suppliers and electronic interfaces that sell imported products to buyers in the EU.

They should “collect, report and pay VAT to tax authorities, rather than making the buyer pay VAT at the time the goods are imported into the EU“as was the case until this month of June.

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This situation was partly beneficial for users who bought products below a cost of 22 euros. They didn’t have to worry about customs formalities and they could get better prices. However, some sellers in Asia took advantage of this possibility to under-declare many products in order to cross the border without problems.

The IOSS will apply to both sellers and online platforms on any product shipped or transported to an EU country at the time of sale, products or orders that do not exceed 150 euros and that they do not have a special tax such as alcohol or tobacco.

Therefore, all companies that import products of any kind from outside the EU must have a VAT or IOSS-VAT number, assigning an intermediary company that will collect VAT when the product steps on community soil. Companies like AliExpress or Amazon and their sellers from third countries they will apply that VAT to the products and send them with the data and money to comply with the new regulations.

The objective of this measure is to avoid tax evasion that occurs in these bargains, especially from China, which consumers take advantage of online. The result is soon to be seen, but everything indicates that mobile phones and other devices will be sold with a price that is more consistent and similar to that offered by most online stores, matching the competition a little more.