Cross Power Enterprises Need To Pay Attention To The Implementation Of New EU Policies
In order to develop the digital strategy, EU reforms the VAT collection method of cross-border digital services in the fields of telecommunications, broadcasting, electronic services, cross-border e-commerce, etc. The EU's VAT reform program for cross-border e-commerce will be implemented on July 1, 2021. Some of the reform items involve the customs, including the cancellation of the VAT exemption policy for imports less than 22 euros, the cross-border e-commerce platform enterprises are responsible for collecting value-added tax in the sales process, compiling the import list under the VAT identification number, and unifying the annual tax-free trade volume in the EU (hereinafter referred to as the "New Deal"). According to the official estimate of EU, after the implementation of the new deal, 7 billion euro value-added tax will be increased every year, and all Member States will benefit from it.
#1 introduction of EU cross border e-commerce value added tax reform scheme
01 the new deal abolished the tax-free unit price of commodities and the annual tax-free trade volume of enterprises
According to the current EU policy, in order to reduce the pressure of customs supervision, the value-added tax will be exempted for imported goods below 22 euro. Some traders make use of policy loopholes to deliberately understate the price and evade tax. The new EU cross-border e-commerce value-added tax (VAT) policy on cross-border e-commerce abolished the provision that goods with a unit price of less than 22 euro are exempted from import VAT, and the value of all imported goods is subject to import value-added tax.
At the same time, the current EU policy is relatively loose in terms of enterprise tax-free annual trade volume. EU Member States independently set up the taxable registration amount of cross-border e-commerce trade, the amount of which varies from tens of thousands of euros per year (for example, Germany's value is 100000 euro / year, while France's is 35000 euro / year). Cross border e-commerce enterprises that do not reach this trade amount are not required to pay tax for trade activities, And the trade volume of each member country is not superposed. The European Union thinks that the current tax-free policy leads to the disadvantage of the enterprises in the EU in the price competition, and causes a lot of tax losses. In the new deal, the EU reduces the annual taxable trade volume to 10000 euro per year, and the calculation is superimposed within the territory of each member state. That is to say, if the total amount of cross-border e-commerce transactions in EU countries exceeds 10000 euro in the current year, the value-added tax shall be paid, and the tax rate shall be between 17% and 27%.
02 new deal provides "one stop service" platform
At the same time of reforming the tax policy, the EU's new deal simplifies the declaration procedures of cross-border e-commerce imports and implements the "one-stop service" platform declaration. E-commerce platform enterprises can register on the "one-stop service" platform, obtain the VAT identification number, and go through customs clearance procedures, so as to simplify the declaration process for B2C goods with goods value not exceeding 150 euro. At the same time, the EU does not require the use of a "one-stop service" platform for B2C goods up to 150 euro. The European Union has launched an alternative plan, in which businesses can choose to levy import value-added tax from consumers by postal service, express delivery enterprises and customs declaration agents. Generally, postal, express delivery enterprises and customs declaration agents pay value-added tax to the Customs on a monthly basis, thus exempting them from the procedures of paying value-added tax on entry.
03 New Deal focuses on tax efficiency
The new EU policy requires Member States to prepare a monthly import list based on the VAT identification number of cross-border e-commerce enterprises. The customs of Member States transmit the data to the digital supervision system every month. The tax authorities of all Member States can directly obtain the actual transaction scale and transaction price of e-commerce enterprises from the system, and improve the tax collection efficiency by comparing the VAT declaration form data submitted by the VAT ID number holder.
In addition, the new policy makes it clear that cross-border e-commerce platform enterprises bear the main responsibility of levying value-added tax in cross-border sales, and is responsible for collecting and remitting value-added tax to tax authorities.
The influence of "2" on small and micro export enterprises of cross border e-commerce in China
01 the tax burden level of China's small and medium-sized enterprises has increased
From the perspective of commodity unit price, at present, China's small and medium-sized e-commerce enterprises export goods to the EU, accounting for a considerable proportion below 22 euro. The new policy will abolish the provisions on the exemption of import value-added tax for goods with unit price below 22 euro, which has a great impact on China's small and medium-sized cross-border e-commerce export enterprises. According to the current tax rates of Germany and France, the tax burden of a commodity with a unit price of less than 22 euro may increase by about 19% after the import tax is levied and the relevant deduction policy is enjoyed.
In terms of trade scale, in 2020, a considerable proportion of China's enterprises exporting more than 10000 euro to EU. After the implementation of the EU's new deal of 10000 Euro annual sales threshold, China's cross-border e-commerce enterprises with annual sales of more than 10000 euro in the EU need to register in the EU and complete the VAT declaration and payment procedures. According to the current value-added tax rate of 17% - 27%, the sales tax burden will be greatly affected.
02 improve the qualification requirements for small and medium-sized enterprises
As the new policy makes clear that cross-border e-commerce platform enterprises bear the main responsibility of levying value-added tax in cross-border sales, and is responsible for collecting and paying value-added tax on sellers, the requirements of major e-commerce platforms for e-commerce enterprises' qualification are improved, and the compliance costs of small and medium-sized enterprises are increased. The major cross-border e-commerce companies in Europe have indicated that they will actively comply with EU requirements. E-commerce platforms such as Alibaba express and Amazon said that they would strictly implement the new policy. If the seller does not comply with the VAT regulations, the seller's account will be verified and cancelled.
03 convenience measures to reduce enterprise cost
Because the EU allows foreign businesses to declare goods with unit price no more than 150 Euro through the "one-stop service" platform, the goods are exempted from VAT when entering the country, and the import VAT collection procedures of goods are transferred from the import link to the sales link, and the payment is made on a monthly basis without registration in other EU Member States, which effectively simplifies the import declaration process of goods, It also helps to reduce the capital pressure of cross-border e-commerce export enterprises in China.
(source: China clothing association)
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