E – commerce The consumer cannot always rely on a foreign online store to account for the VAT paid to him: “This allows for certain scams”

European VAT reform could lead to e-commerce scams. However, the reform will reduce the administrative burden on companies selling goods.

July The common EU VAT reform, which will enter into force at the beginning of the year, will make online purchases of less than € 22 from outside the EU taxable. Until now, shipments up to EUR 22 have not been subject to VAT or customs clearance.

As part of the reform, the EU will set up the Import One Stop Shop (IOSS). In the future, non-EU online retailers registered in the IOSS system will be able to charge the consumer VAT on purchases up to EUR 150 already when making an online purchase.

Until now, VAT on online purchases has been paid to Customs, mainly by the consumer when the package arrives in Finland.

The tax already paid in the online store is intended to smooth the package’s journey for the consumer. For example, in the future, Posti may, on behalf of the consumer, clear a consignment for which VAT has been paid in advance.

Any however, there is no guarantee that VAT charged to the consumer will actually end up in the e-commerce to the European taxpayer. Registration in the IOSS system is voluntary for businesses, and the consumer cannot check whether a particular foreign online store is a member.

“Pre-registration for the system is underway and companies have been interested in it. However, it is not possible to provide detailed information about registered companies to the public, ”says the Inspector General of the Tax Administration. Annaliisa Pöyhönen.

Already, fraudsters can try to charge the consumer various charges that are not actually related to import taxes. The consumer should be careful when switching to the new system.

“This allows for certain scam opportunities on the vendor side. The store may also try to charge more VAT than what it charges. You can try to protect yourself from scams by ordering from reliable online stores, ”says the Chief Customs Inspector Nadja Painokallio.

New With the import system, a non-EU online sales company only needs to choose one country through which to process VAT returns for payments throughout the EU. In the past, registration has had to be done for each member state separately.

“The advantage of the system is that the administrative obligations of companies are reduced. Administrative costs can be high, and resources can now be freed up for other things, ”says Pöyhönen of the Tax Administration.

The centralization of the VAT system also applies to the EU’s internal market. E-commerce in an EU country has previously had to be registered for VAT separately in all Member States to which they sell goods to consumers. In the future, this can be handled with a single notification. Finnish companies can register for the EU’s common VAT system through the Omavero service.



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