By Alexander Maasik
On July 1st, 2021, new EU trade regulations completely changed how exporting goods from the UK to the EU works. New requirements impact sellers in both the EU and the United Kingdom.
Any change to trade regulations anywhere in the world brings with itself some sort of a mess. A great example of that is the massive disruption in trade that happened after Brexit. Although everyone knew it was happening on January 1st, 2021, most people and businesses were not ready for this. This is best illustrated by the huge number of people who experienced issues with both shipping and taxes once the UK had officially left the European Union.
Looking at the movement of goods between the EU and UK, you can see countless stories of people who discovered that they needed to pay extra for their parcels once the goods were delivered. Or you can read about cases where companies were not ready for new customs checks and regulations. This unpreparedness resulted in delays and confusion for everyone involved.
The new regulations are here. Customs will enforce them. And if you don’t comply, you will not be able to do successful business in the EU.
What will change for companies in the UK?
Up until now, most of the consumer goods imported into the EU have not been declared in customs.
Most of them fell under the Low-Value Item Exemption. This exemption is abolished, meaning that all goods entering the EU must now be declared in customs and VAT needs to be paid for them by the seller. One must collect VAT on all goods they are selling to the EU at the point of sale. What’s more, the VAT rate is dependent on the country of destination. Sellers must therefore be able to determine the VAT rates of specific goods for all of the EU countries they want to deliver to.
To declare VAT and other duties, the EU is introducing the Import One Stop Shop (IOSS). IOSS allows businesses to collect, declare, and pay VAT on low-valued consignments (up to 150 euros in value) in one EU member state. This system replaces the current obligation to register in every country where one is selling goods in the EU.
What happens if I don’t comply with the new regulations?
It is safe to say that the EU will start enforcing these rules very quickly. Sellers who hope to get past them will discover that their goods get stuck in customs and their customers will be unhappy.
Eurora Intelligent Cross Border Compliance Platform can handle all of these issues. Eurora is a cross-border compliance platform that was developed with just that goal. To fully automate all aspects of cross-border trade and to make shipping goods to any part of the world as easy as possible. Eurora’s fully automated and science-backed AI-based solutions allow companies to save time and resources while handling large amounts of data near-instantly and precisely.
For non-EU sellers, Eurora can also be the fiscal representative in the EU who manages and handles taxes and duties under the IOSS scheme. We are one of the first companies in the world to offer this service.
If a company also uses other Eurora services like the Duty & Tax Calculation or HS Code Allocation, our system can easily put together the VAT data needed for the IOSS. And also put together electronic declarations and deliver them to customs automatically.
Don’t hesitate to reach out if you wish to learn more about how to keep selling goods to the EU.
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