The EU VAT reform may affect the smooth functioning of foreign trade in July – online shoppers should already take possible delays into account when ordering goods
Purchases from online stores outside the EU will probably create a backlog in July, when the EU VAT reform enters into force. Preparations for the reform have been made in extensive cooperation, but Finnish Customs reminds customers that despite this, the reform may delay deliveries. Online shoppers should already take this into account when ordering goods, because it often takes weeks for parcels to arrive from outside the EU.
From 1 July 2021, all parcels from outside the EU must be declared, and VAT has to be paid for them. This change will enter into force in all EU Member States, also in Finland. Finnish Customs has been preparing for this change for a long time. In addition to system reforms, Finnish Customs has concentrated on facilitating the controls and inspections of consignments. The customer service has been strengthened through recruitments, and temporary resources have also been gathered within Finnish Customs.
– This is a global-scale change as regards online purchases as well as other low-value goods delivered from outside the EU. We have been cooperating closely with our interest groups at national and international level. The annual number of customs declarations will increase from the current level of less than a million declarations to over ten million or even more. The complex new set of information systems may have a tough time processing this mass. We have been testing the functionality of the systems, but due to various delays, there are still risks. The partners’ systems as well as the online shoppers’ insufficient knowledge of this change could also create challenges, says Hannu Mäkinen, Director General of Finnish Customs.
– This is why we already want to bring up the possible July backlog regarding goods purchased from outside the EU. In the worst case, the arrival of these new consignments that must be declared will also affect the capacity of the entire customs clearance system and consequently the smooth functioning of foreign trade, emphasises Mäkinen.
A parcel ordered now may be caught in the backlog in July
Finnish Customs estimates that the EU VAT reform will have an effect on the online purchases in July. The arrival date of the parcel is decisive. If you order goods now and they arrive in July, you may have to declare the parcel and pay the VAT.
– Regarding urgent orders, we advise everyone to consider where to order the product. In the case of extensive reforms, unforeseen problems are always possible. The delivery of parcels from outside the EU often takes weeks, so parcels ordered now may be caught in the possible backlog in July, says Nadja Painokallio, Senior Customs Officer.
Despite the preparations, the millions of new parcels that must be declared will in all probability also affect the customer service response times of Finnish Customs. However, you can often find answers to your questions on the Finnish Customs website.
– On our website, you can find answers to many questions about customs clearance. The guidance in our Import Declaration Service for private persons also provides answers to the most common questions. You will find the guidance concerning the reform on the page “Everything must be declared” on our website, says Painokallio.
The aim of the EU reform is to create a more equal competitive position for domestic and other EU businesses when compared to the non-EU online sellers. At present, consignments worth up to 22 euros are usually tax-free, and millions of them are ordered every year from outside the EU.
More information: Everything must be declared