The Cross-Border E-commerce becomes increasingly mature, Europe is imposing increasingly strict requirements on Cross-Border E-commerce for tax reporting. More and more Cross-Border E-commerce logistics service providers and sellers are beginning to caution that the compliance (both product and tax ) of the European market is become a trend or a Law enforcement. They are choosing to gradually transition from VAT inclusive customs clearance to VAT deferment customs clearance. VAT deferment customs clearance may become the mainstream model for customs clearance in Europe in the future.
VAT deferment customs clearance in Europe is a customs clearance model for importing goods into EU countries. Sellers use their own VAT number as the importer for customs declaration. The import VAT does not need to be paid immediately, but can be deferred until the goods are sold. The seller can then claim back the import VAT, and pay the corresponding sales VAT based on the sales amount.
When the goods enter the EU country of declaration (currently the main countries for self-tax deferral are Belgium and the Netherlands) and the destination country is another EU members, the goods can be cleared through customs apply VAT deferment customs clearance.
As a legal and compliant customs clearance method, VAT deferment customs clearance in Europe relieves financial pressure on companies and has become the preferred solution for many sellers. However, it also draws close scrutiny from customs and tax authorities because import VAT is not paid during customs clearance. If a seller declares a customs value noticeably lower than the market price for a shipment, it is very likely to trigger an inspection.
In summary, compliant operation is the only right choice for the industry to develop in a healthy and orderly manner. PGS CBEL has a professional customs clearance team in Europe who are familiar with European customs clearance procedures and have extensive customs clearance experience. PGS CBEL provides FBA logistics services for FCL and LCL, and is a reliable choice for Cross-Border E-commerce sellers!
• What is VAT?
VAT: It stands for Value-added Tax. It is a type of turnover tax, but not every country levy VAT. For example, the United States doesn't levy VAT.• What is VAT deferment customs clearance?
In Europe, when declaring imports in EU countries and the UK, they not only levy customs DUTY, but also VAT.VAT deferment customs clearance in Europe is a customs clearance model for importing goods into EU countries. Sellers use their own VAT number as the importer for customs declaration. The import VAT does not need to be paid immediately, but can be deferred until the goods are sold. The seller can then claim back the import VAT, and pay the corresponding sales VAT based on the sales amount.
When the goods enter the EU country of declaration (currently the main countries for self-tax deferral are Belgium and the Netherlands) and the destination country is another EU members, the goods can be cleared through customs apply VAT deferment customs clearance.
• What are the benefits of VAT deferment customs clearance for sellers?
1) It helps sellers ease cash flow pressure
The time between customs declaration and final sale is usually variable. VAT deferment customs clearance can improve sellers' cash flow. For high value goods, it can greatly reduce financial pressure and improve capital turnover.2) It simplifies the customs clearance process
When declaring imports, applying for VAT deferment customs clearance means no VAT needs to be paid upfront. After the goods are sold, VAT can be paid in one go. Especially as many e-commerce platforms now have withholding and remitting mechanisms.• How to apply for VAT deferment customs clearance?
VAT deferment customs clearance is just a type of customs clearance, it doesn’t require application. Sellers only need to inform their logistics company to use VAT deferment customs clearance before shipment, and provide the required information.• What issues should be noted for VAT deferment customs clearance?
- Provide customer's destination country VAT number and valid EORI. EORI can be from any EU country.
- Provide the product sales link that matches the actual goods (the seller's VAT shown in the sales link must match the VAT used for import declaration).
- Must declare the value of the goods, recommended to declare around 65% of the sales link price based on the "reverse calculation" principle.
- Products must have correct CE markings and "MADE IN CHINA" labels, shown on the product itself and its outer packaging.
- Must provide POD within 15 days after customs clearance.
- Must provide VAT payment proof for shop sales every quarter.
- The Liège, Belgium can provide customs clearance service using offshore tax number (Chinese company), The Antwerp, Belgium only provides customs clearance service using EU domestic company tax numbers.
As a legal and compliant customs clearance method, VAT deferment customs clearance in Europe relieves financial pressure on companies and has become the preferred solution for many sellers. However, it also draws close scrutiny from customs and tax authorities because import VAT is not paid during customs clearance. If a seller declares a customs value noticeably lower than the market price for a shipment, it is very likely to trigger an inspection.
In summary, compliant operation is the only right choice for the industry to develop in a healthy and orderly manner. PGS CBEL has a professional customs clearance team in Europe who are familiar with European customs clearance procedures and have extensive customs clearance experience. PGS CBEL provides FBA logistics services for FCL and LCL, and is a reliable choice for Cross-Border E-commerce sellers!
