On 1 July 2022, the EU #VAT Ecommerce package and its Import-One-Stop-Shop (#IOSS) entered into force: while all #import #shipments to the EU became subject to VAT, IOSS allowed VAT on low value #consignments (#value <EUR 150) to be paid at the time of #purchase. 

𝗘𝗨 𝗩𝗔𝗧 𝗘𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗲 𝗽𝗮𝗰𝗸𝗮𝗴𝗲: 𝗗𝗗𝗣 𝗺𝘂𝗰𝗵 𝗲𝗮𝘀𝗶𝗲𝗿, 𝗯𝘂𝘁 𝗮 𝗯𝗹𝗼𝘄 𝘁𝗼 𝗗𝗔𝗣

However, many shipments have continued to use #DAP (Delivery At Place/DAP, replacing Delivery Duty Unpaid/ #DDU) with the #buyer responsible for paying #import duties such as VAT. Often #C2C #businesses and #SMEs do not want, or are not able, to use IOSS and obtain IOSS VAT #registration in the EU – and this group of #suppliers uses the #postal channel more than most.

DAP has become a significantly more difficult #delivery method. Prior to 1 July 2022, most postal items were VAT-exempt (intrinsic value below 22 EUR). Now, however, import duties for DAP consignments must be collected from the #recipient at the point of delivery. In the postal #channel, #collection is the responsibility of the EU postal operator at #destination (DO or Express operator). The EU postal operators charge #fees for collecting VAT (and #customs duties where the value exceeds 150 EUR), making DAP delivery significantly more expensive for recipients. #Volumes in this area have fallen correspondingly.

𝗣𝗿𝗶𝗺𝗮𝗿𝘆 𝗶𝗺𝗽𝗮𝗰𝘁 𝗼𝗻 𝗗𝗢𝘀 𝗳𝗮𝗰𝗶𝗹𝗶𝘁𝗮𝘁𝗶𝗻𝗴 𝗲𝘅𝗽𝗼𝗿𝘁 𝘁𝗼 𝘁𝗵𝗲 𝗘𝗨 – 𝘀𝗼𝗹𝘂𝘁𝗶𝗼𝗻𝘀 𝗻𝗲𝗲𝗱𝗲𝗱

Although there has been unprecedented #growth in #digital #retail, the collection of #import duties/VAT and customs by postal delivery agents or at post offices is managed more or less exactly as it was a century ago. The convenient #digitalpayment options common in #ecommerce are as yet unavailable, even though many #EU postal operators have set up sophisticated #online portals for digital services.

Why? One reason may be that, despite the decreased #volumes, the “analogue” #collection of duties is a very lucrative source of #revenue for DOs, and so far other service #providers are not offering an #alternative, competitive duty collection #service.

Therefore, it can be assumed that over the medium term, non-EU DOs will move away from the #UPU channel as soon as digital #platforms start to provide consumer-centric, easy to use payment services in the EU and/or that EU postal operators will provide such payment services to keep the DAP channel competitive.