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31
03
2021

Orders from China should be rushed to avoid the additional tax from July

According to Omniva international segment manager Marita Mägi, the tax amendment that will take effect on 1 July means a significant growth in parcel volumes from China in the second quarter, as consumers will try to get their goods before the additional taxes are applied. Since delivery times may stretch up to two months, you should start ordering now to avoid the additional taxes.
 
From 1 July, it is mandatory to declare and pay VAT on parcels from third countries (e.g. USA, China and now also the UK) that cost less than 22 euros. This means that the lower limit of tax exemption for goods outside of Europe will disappear. The clients should also consider that taxation of the goods depends on when the parcel arrives (to the country), not when it was ordered.
 
According to Mägi, European e-stores are gaining more and more popularity next to Chinese stores, but the majority of goods still arrive in Estonia from China. “Goods coming from China are mainly small items, light in weight and rather lower priced. More than 98% of the shipments from China cost less than 22 euros, meaning they did not need to be declared until now. From the summer, however, it is mandatory to declare and pay VAT on all shipments that arrive in Estonia after 1 July from third countries,” Mägi said. Last year, more than 4 million shipments arrived in Estonia from China.
 
“Since the upcoming changes take effect across Europe, we will likely see a considerable growth in orders from China in the second quarter. However, this also means that all the sellers and carriers over there will be extremely busy, competition for air transport cargo space to Europe will also tighten, and therefore the delivery times may be extended again,” Mägi explained. “If the client wants to receive goods costing less than 22 euros without having to pay VAT, they should order no later than in the first half of April. This way, there is a greater chance of the parcel arriving in Estonia before July.”
 
According to Mägi, the delivery times from China currently vary from one and half weeks to a couple of months. For example, in the case of the popular Aliexpress portal, Mägi recommends selecting the “Aliexpress Standard Shipping” as a delivery option, which makes it more likely that the goods will arrive in Europe on a direct flight. If the ordered items are needed urgently, it would be wise to consider the more expensive express delivery options.
 

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