Buying online outside the European Union

If, on the one hand, shopping online has become the most convenient way to go shopping, this growth in e-commerce has led to changes in VAT rules. And it is already in July that these changes have an impact: the VAT exemption on purchases outside the European Union (EU) worth less than 22 euros comes to an end.
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With this, all extra-community online purchases will pay Value Added Tax (VAT) from July 1, 2021, regardless of the value of the item.
What are extra-community purchases?
The answer couldn't be simpler: all purchases made on online platforms based outside the countries that make up the European Union (EU).
However, this process becomes more complicated when these extra-community purchases include territories that, even within EU Member States, for tax purposes, are considered extra-community, and are therefore subject to customs control and payment of VAT.
These are the exceptions:
  • Germany (Busing)
  • Spain (Canary Islands, Territories of Ceuta and Melilla, Andorra)
  • France (Martinique, French Guiana, Reunion Island and Guadeloupe)
  • Greece (Mount Athos)
  • Italy (San Marino and Vatican)
  • United Kingdom (Guernsey, Jersey, Isle of Mann and Gibraltar)
Furthermore, it is important to know that, also for tax purposes, you must take into account the country of origin of the shipment and not the country of the online store.
Buying online outside the EU: what will change?
These new VAT rules for online commerce were designed to adapt the tax to the new reality.
Initially, the end of the VAT exemption on extra-community purchases was expected to take effect as early as January 1, 2021. However, the pandemic has delayed this process. But it is certain that this exemption for purchases outside the EU will disappear on 1 July. So, for those who like to buy online, the best thing is to enjoy it now!
Because from July 2021, in order to be charged VAT when shopping online, all EU imports must be declared at the border using an electronic customs declaration. In other words, all items sold from a country outside the EU will have to be declared and subject to VAT applicable in the destination country – 23% in Portugal.
The good news is that customs procedures for declaring these items will be simpler!
Simplify administrative and bureaucratic processes
The application of this new directive, if done using the normal customs declaration, would become a time-consuming and time-consuming process, not only for sellers, but also for the entire computer system of European customs.
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It should be remembered that the electronic customs declaration, compared to the normal customs declaration, now requires a smaller set of data suitable for low value orders.
That's why these new rules came to simplify the administrative and bureaucratic procedures that companies face.
In short, what changes is:
  • The obligation to pay VAT and/or customs duties from 1 July for products from outside the Community, regardless of the date they were purchased and the value;
  • The need, on some online sales sites, for consumers to have the option of paying VAT at the time of purchase;
  • The possibility of VAT and/or customs duties may continue to be paid upon entry into Portugal, with consumers having to follow the customs clearance process on the Customs Clearance Portal.
Buying online: the advantages of the new VAT rules
Shopping online is the new reality and there is no getting away from it. E-commerce is a growing area in Portugal, but with the pandemic, online sales grew even more all over the world. For the EU, this growth is an opportunity to standardize procedures between the different EU countries.
With the entry into force of these new rules, the tax authorities promise to simplify the entire process for paying VAT on these extra-community orders. It's supposed to be all online, simple, responsive and fast. All of this turns out to be an advantage, since, until now, products were sometimes held up for no apparent reason at customs and it was a complicated process to clear them through customs.
If you sell online, strictly respond to the new VAT rules
These new rules are part of the European Union's broader agenda to combatVAT fraud in ecommerce and improve administrative performance in internet sales.
But if you have an ecommerce project, then finding the best ally in managing the entire business is the first step to comply with all legal and tax obligations without neglecting profitability. With Jasmin, an   ideal management software for ecommerce business, invoicing is no longer an obstacle to management.
Quickly and intuitively, Jasmin allows you to issue invoices, automatically configuring VAT rates, in addition to offering benefits such as the option for multiple languages, currencies, exchange rate and tax regime. Besides, it’s free for the first six months or until you reach 30,000 euros in billing!
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