Aliexpress adapts to the EU VAT Reform: how the increases for duties and VAT on purchases work

aliexpress reform eu vat vat duties

We told you months ago in advance and now the novelty so feared by customers AliExpress is taking shape: I'm talking about the US VAT Reform. A reform that aims to make competition from e-commerce giants less unfair, with a concrete impact on purchases from China. If you usually buy from Aliexpress you may already be aware of it, but if not, know that all purchases will suffer price increases on VAT. Since this measure will affect the orders of many of you who are reading, I will explain how these increases will materialize, on which products and since when.

Aliexpress confirms price increases for Europe: this is what the EU VAT Reform will entail

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The main novelty of the EU VAT Reform starts from theabolition of the VAT de-minimis (VAT of minimums), the rule that until now had established that it was not necessary pay VAT under € 22. A novelty that will impact many purchases made on Asian online stores, especially Aliexpress. If until now many of us have bought accessories and small objects from China without paying any taxes, from now on this will no longer be the case. Furthermore, Aliexpress confirmed that the VAT calculation will be applied on all orders, even over € 22. All these changes do not only concern China, but all countries outside the European Union, therefore also for purchases from the United Kingdom, for example.

When do the increases start?

As confirmed by Aliexpress, the EU VAT Reform will officially start from 1 July 2021. All orders placed from this day on will be subject to the new rules which are explained in this article.

What if I placed an order before July 1st?

If the order you placed on Aliexpress was completed before July 1st, then you shouldn't incur any increases. I say this because the VAT calculation (which I will explain in the next paragraph) takes place at the time of purchase and not at customs. However, I cannot assure you 100% that orders that pass through customs after 1 July will still not be processed under the new guidelines.

How to calculate VAT on Aliexpress?

So far, except for random checks, any order from China arrived in Italy without having to pay any VAT. But with the EU VAT Reform everything changes: first of all, the abolition of the VAT de-minimis provides that even orders under € 22 from Aliexpress are subject to the calculation of VAT. This means that small orders will have an increase: according to Italian law, it is set at 22% of the amount and will be indicated at the time of payment. The new rule, in fact, provides that Aliexpress collects this sum and then pays it directly to the various European customs offices. In this way, it is avoided that customs are involved in the collection of VAT.

But the news does not end here. As I told you, also for orders over 22 € you will have to pay a + 22%, always at the time of purchase. Below you can see a simulation of purchase:

aliexpress VAT calculation

How to calculate the duties on Aliexpress?

As for customs duties, the rule in force so far does not change, neither for Aliexpress nor for the other Chinese stores. This means that the customs tax will continue to apply only on purchases over € 150 of amount. The calculation remains unchanged and amounts to 3-7% of the amount depending on the type of product: you can find the complete list on the website of the Customs Agency.

What if I buy from Aliexpress with shipping from Europe?

We must open a specific and necessary parenthesis for those who make purchases from Aliexpress sellers with shipping from Europe. The rule imposed by the platform provides that the payment of VAT is not expected only if the seller resides in Europe and ships from Europe. On the other hand, if the seller resides in China but still ships from Europe, then the payment of VAT will be imposed as if they were shipping from China.

What will happen to the "Gift" packages?

A method so far used by some "smart" of Aliexpress to avoid duties and VAT on orders over € 22 was to mark them as gift packages. In this way, except for random checks, the parcels illegitimately avoided customs checks, as gifts are exempt from taxation regardless of the amount. A maneuver that the EU VAT Reform directive will fight with the introduction of the new ICS2 (Import Control System 2) customs clearance system. To be able to circulate in Europe, a detailed description of the content will be required, even for those packages generically marked as "Gift". The description must be accompanied by the HS (Harmonized System) code, which is the international standard for the classification of the type of goods.

This means that it no longer makes sense to contact the seller to ask him to bring the word "Gift" on the package, because the checks will avoid this dynamic. Not to mention that trying to do it anyway risks making the package remain stationary at customs.

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