We’ve already informed you several times on our website about the reform from the European Union for cheap purchases from China, or from third countries: click here. AliExpress, as the biggest online marketplace, had to adapt to the reform and they’re now sharing information about new tax obligations.
A lot of people are still using cheap orders from China, so the fear of ordering something from China right now is understandable. But we’ll shed more light on this problem for you.
Updated 1.7.:
AliExpress confirmed VAT on all products
The world's largest Chinese online marketplace, AliExpress, has issued an official statement on the tax reform for parcels imported into Europe. The biggest change is the abolition of the exemption for parcels up to €22, for which tax did not have to be paid until now and which were not held up at customs either. So we avoided 20% VAT as well as the customs processing fees charged by Slovak Post.
From now on, you’ll have to pay VAT for absolutely all parcels, because the EU wants to “balance fairness” between local retail and imports.
It was confirmed that AliExpress will increase product prices by VAT, meaning VAT will be paid right when you place the order on their website. You won’t have to deal with it additionally during customs clearance.
If you can’t find an answer to any of your questions in our article, click the Q&A section from AliExpress dedicated to the new customs rules.
When do the new VAT rules start?
Changes on AliExpress will apply from 1.7.2021, when the EU reform also comes into effect. So all orders from that date onward will be subject to the new rules.
What if I ordered before July 1?
If you managed to order the products before 1 July 2021, you won’t be affected by any price increases within AliExpress. However, the parcel can still be stopped at customs, because customs now looks at when the parcel arrives in our territory, not the order date. We explain everything in this article.
How will VAT payment work on AliExpress?
As we mentioned, from now on you’ll have to pay additional VAT for products of every value. The tax rate differs by country (in the Slovak Republic it’s 20%), which AliExpress also takes into account. So the product price will be increased by the VAT of that country, and AliExpress will handle the collection of VAT—no matter the product value, as long as we’re talking about delivery to EU countries. Also, if the seller is registered outside the EU. You can see other cases in the image below.
If the seller is registered in the EU, then VAT collection on delivery to a country within the EU will be handled by them. But those sellers are a small minority on the AliExpress marketplace, and almost all are registered in Hong Kong or directly in China.
The VAT item, i.e. VAT, is displayed on AliExpress in the cart. You’ll find it right under the shipping cost.
You’ll see the VAT (i.e. VAT) item in the cart at the first step of checkout. It will appear exactly where the shipping costs are, or where you have a seller coupon discount.
You’ll also be able to get an invoice for each of your new orders. You can find them in your profile in the orders list, and next to each one you’ll see a button to download the invoice.
How will customs duty payments work?
The exemption from customs fees for products up to €150 does not change. Up to this amount, you only pay VAT, and you’re exempt from customs duty. However, you also need to factor in the fee for processing customs clearance, because the product will be stopped at customs for sure. We write about this in our new article, where you’ll also find the new fees charged by the Slovak Post. The sad news is that the fee applies even if you arrange the customs clearance yourself, without authorizing the post office.
The customs duty exemption for goods up to 150 € remains unchanged. These rules stay the same as before.
The amount of customs duty varies depending on the type of product, VAT, shipping, and more. To calculate the exact customs fee, use this calculator.
What if I order a product from an EU warehouse on AliExpress?
Originally, we had information that purchases from EU warehouses on AliExpress would not be increased. However, after the new rules were launched, we found out that the VAT (DPH) is added to the cart even for products from EU warehouses. At the moment, we don’t have information on whether, in addition to this, you’ll face any further increases—meaning paying customs duty (if the package is over €150) or the need to handle customs clearance, which is also subject to fees. More in the article about Slovak Post fees.
Unfortunately, the VAT (DPH) is added on AliExpress even for products stored in European warehouses.
Since the AliExpress platform is registered in Hong Kong and it is a country outside the European Union, they are required to collect VAT on goods delivered to customers in the EU, including cases of delivery from warehouses outside the EU up to a value of 150 € or when the goods are delivered from warehouses within the EU.
Collecting VAT even for EU warehouses is caused by the country where AliExpress, as a platform, is registered. They operate in Hong Kong, meaning outside the EU, so they have to collect VAT for all goods without exception.
What about packages that are marked as a gift?
Some smarter shoppers on AliExpress often used gift package labeling. That way, they avoided paying VAT for packages more expensive than €22. This made it possible to avoid the order from China becoming overpriced—except for the packages that were randomly checked. One of the EU’s moves is introducing a new customs clearance system, ICS2 (Import Control System 2).
To ensure smooth customs processing, you’ll need a detailed description of the packages and their contents. This will also apply to packages marked as a gift. The description must include an HS code (Harmonized System), which is the international standard for classifying the type of goods.
More hassle with the new reform
A new EU reform therefore brings a number of additional unpleasant hassles for the end user, and the goal is clear – to discourage shopping from China and support local stores. But whether this is the right step will be shown by time, and we’re very curious how customs will manage with the much higher volume of parcels. In the last month or two, they already had major problems processing customs formalities within a reasonable timeframe.
But at least AliExpress helps make VAT payment easier this way. With the new rules, we will definitely test the shipping, and we’ll also publish a detailed guide on how to handle customs clearance yourself. Just keep in mind that you’ll need an ID card with a chip, a card reader, and all the required certificates on your computer.
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