E – commerce Work was done overnight at the Post Sorting Center when the EU tax reform came into force – the number of parcels to be cleared up to 40 times

Packages moving along the line of the huge hall at a steady pace. Every now and then one of them finds his destination and is tipped from the line to his own ramp. That’s on its way to Kuopio, this one to Tampere.

There goes a small gold-colored package from China. If no VAT has been paid on it, it ends up at the Customs ramp.

Thursdays were expected in a tense atmosphere at the Post’s logistics center in Tikkurila, Vantaa. From Thursday, all purchases from outside the European Union must be subject to value added tax (VAT) and customs clearance. The change is based on a common EU VAT reform.

That means a lot of extra work for Customs and Post.

“This is a busy day for us. The law changed at midnight, and before that the hall was emptied of packages. Work has been done overnight,” says Posti’s director of international e-commerce services. Sami Finne.

Sami Finne, Director of Posti’s international e-commerce services, at Posti’s parcel sorting center in Vantaa.

Previously Shipments of up to € 22 have been able to be ordered from outside the EU without tax or customs clearance.

About 250,000 e-commerce consignments worth more than 22 euros have been received in Finland each year so far.

Inspector General of Customs Nadja Painokallio says that now the number of packages requiring customs clearance rises to 10 million a year.

“Posti delivers about 16.5 million parcels worth up to 22 euros a year. Our estimate is lower than this because we assume that customers change their shopping behavior, ”says Painokallio.

The Post’s parcel sorting center has one and a half kilometers of parcel lines. The packages move on lamella-like slats, and fall into slide-like slides when they reach their destination.

It may be that some of the VAT reform will reduce ordering from online stores outside the EU. In Sweden, for example, customs duties began to be levied on all Chinese imports as early as 2018. Number of China packages decreased by 85 percent.

People have in the past split their small purchases into many packages to avoid exceeding the € 22 customs clearance. In the future, this will no longer be useful, so the total number of packages may decrease.

“It remains to be seen how Finnish customers operate. But what is certain is that, for example, people who order even small technology components really cheaply from China will hardly stop it because of this, ”Painokallio says.

According to Painokallio, the majority of non-EU shipments up to 22 euros come to Finland from China.

Postal The sorting center in Tikkurila, Vantaa, is the largest in Finland. About 70 per cent of all Finnish postal parcels are processed there every day.

Sorting Center Production Manager Janne Mattila says that an average of 130,000 to 140,000 packages pass through the center every day. At the peak of Christmas, there were a record number of packages per day: 290,000.

A device called a camera tunnel reads the barcodes of postal packages.

At 2 p.m., Thursday afternoon, there will be a big moment when the first air cargo covered by the new legislation will be unloaded on the line. On the line, all packets pass through a camera tunnel that reads barcodes from them.

The barcode reveals where the package has come to Finland, whether it has been cleared through customs and whether VAT has been paid on it.

If VAT has not been paid, the package ends up in the Post’s customs warehouse waiting for the customer to be cleared and taxes paid. The post office then sends the customer an arrival notification for the consignment to be cleared through customs. If the VAT has been paid, the package can continue its journey on the Post’s line.

VAT payment can now be made at the point of purchase in some non-EU online shops.

The EU has set up a VAT payment system for the import of goods from outside the Union, known as the Import One Stop Shop, or IOSS. The system allows online retailers to charge the buyer VAT at the time of purchase. This is possible for purchases up to 150 euros.

This does not apply to restricted and excise goods on which import duties are paid at the time of customs clearance.

From large Chinese online stores, for example Alibaba and Wish have introduced the system.

“I would estimate that the largest online retailers, about 70 percent of package volume, will adopt the IOSS system,” says Post’s Finne.

If the purchase price exceeds 150 euros or the seller does not charge VAT to the buyer, customs clearance and payment of taxes remain the responsibility of the buyer. In Finland, the most common VAT is 24 percent, and it is calculated on the value of the entire package, including transport costs.

If Posti is responsible for transporting the package, VAT can be paid and customs clearance handled in Posti’s application or online even before it arrives in Finland. The post office charges 90 cents for the service.

Taxes can also be paid directly to Customs after the arrival declaration in connection with customs clearance, in which case Posti will charge a handling fee of EUR 2.90.

Customs According to Nadja Painokallio, the change in the law requires the consumer to be more attentive when shopping online. For example, not all online stores say that the goods leave the central warehouse in China.

“It’s one that many are hacking into, and suddenly taxes and customs are the customer’s responsibility,” Painokallio says.

On the other hand, many Chinese online stores have already set up their own warehouses in the EU, say Customs Pitkäniemi and Painokallio.

“If a company has set up warehouses and customs in Europe and has already paid VAT on the goods, the goods are in free circulation. In this case, the buyer no longer has to clear the shipment or pay taxes. The taxes have then been paid at a different stage, ”says Painokallio.

However, it may sometimes be the case that a company has a customs warehouse in the EU.

“When a duty-free product is sold, the buyer has to pay import taxes in connection with customs clearance. But more common is that the goods have already been cleared before, ”says Painokallio.

Painokallio urges you to look at the e-commerce website and, if necessary, ask the seller whether the customs responsibility remains with the customer.

“Would you dare use these, ”the customs inspector asks the chief of aviation duty From Mika Pitkäniemi.

A package from China has been opened in the customs control area, inside which poison pads to be placed in an insect repellent have been revealed. Their content is subject to further investigation.

Poison pads of an insect repellent device imported from China were found in the letter bag.

No prior information was previously received on the contents of packages with a maximum of 22 euros, Pitkäniemi points out. Now their control becomes more effective when information is received about all shipments.

In March, customs moved from their office near the airport to the Post’s logistics center so that customs clearance could take place seamlessly in the same premises where the mail is sorted.

The premises are still in the stage: Customs has its own area separated by tarpaulins from the corner of the large hall. It is planned to build its own control line in its place.

Once this is done, the duty-free parcels are to move smoothly from the post office line directly to the Customs screening, to the checkpoint and from there back to the mail for sorting or further processing by Customs.

Customs inspector Aleksi Laikari examines inspected parcels in the Customs inspection area at the Post’s parcel sorting center in Vantaa. On the right, Mika Pitkäniemi, Head of Aviation Customs.

An automatic control line is also under development, which would indicate if the package reveals something that requires closer examination by Customs.

In the final games, the change in EU law will also support Customs’ inspection work, because everything will come, says Pitkäniemi. In the past, customs inspectors had to open heavy air cargo bags and look for packages that required customs clearance at hand.

“The mass was big: about a million packages a month. Nothing could control them enough,” Pitkäniemi says.

Customs has anticipated that the change in the law will cause congestion in the processing of parcels. Both Customs and Posti have prepared for congestion by hiring more employees.

How congestion is managed will be seen within the next few days.

July may go to practice, but eventually things will get faster for the customer, believes Posti Post’s Sami Finne.

“Especially if taxes have been paid in advance.”



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