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21.06.2021
According to changes in the European Union (EU) regulations, from the 1st of July 2021 all goods purchased outside the EU, including in online stores, will be subject to value added tax (VAT). In order for a person to receive the postal items, the goods will have to be declared to customs. With the entry into force of the new regulations, the number of items requiring customs clearance could increase several times, but Latvijas Pasts has prepared for the new procedure by investing substantial resources in new digital solutions for customer service and data exchange, as well as by bringing on new employees.
The new taxation system for postal items from third countries will apply to the entire postal sector throughout the EU, including absolutely all postal operators in Latvia and their customers, that is virtually every resident of Latvia who buys goods in third-country online stores or receives items from friends or family living outside the EU.
“Most of the items which require customs clearance currently come from China: according to our estimates, they constitute up to 95% of the total volume of items subject to customs clearance. If in 2020 the total number of items received at Latvijas Pasts and requiring customs clearance slightly exceeded 5,000 units per month on average, then in the first months of 2021 after Brexit that figure doubled, jumping to an average of about 11,000 items per month. The forecast of the potential volume of customs clearance after the 1st of July could be as many as 20,000–25,000 items per day,” Mārcis Vilcāns, Chairman of the Board of Latvijas Pasts, points out.
Over the past year the number of e-commerce items has increased significantly both in Latvia and in the world as a whole, and internationally significant events such as Brexit have not affected it. The experience of Latvijas Pasts shows that the volume of items from the UK has not actually decreased since the beginning of the year. It should be taken into account, however, that some British e-commerce platforms have moved their warehouses to the EU.
“It is possible that with the entry into force of the new regulations, the volume of items will decrease slightly: we assume that the number of items of a very low value will decrease, as they will simply not pay off for people due to customs clearance. It is also possible that initially the volume of items will be smaller, because some people will be cautious about the customs clearance procedure, will not want to deal with additional formalities, etc. But over time, these people will most likely return to their previous habits again,” M. Vilcāns explains.
As before, a customer who receives an item requiring customs clearance will be able to choose to carry out the customs clearance himself or herself in the EDS system of the State Revenue Service or apply for this service at Latvijas Pasts, whose customs brokers have been providing customs clearance services for around 700 items on average per month this year.
In order to make the process of customs clearance and receipt of items easier for customers, from the 1st of July Latvijas Pasts will offer an even more convenient, simpler and cost-effective customs clearance service: an electronic tool which can be accessed from any smart device or computer using a link unique to every recipient and which allows convenient and easy customs clearance of items and payment of taxes. Latvijas Pasts has so far invested around EUR 285,000 in the new digital customer service solutions and provision of international data exchange from the 1st of July. In preparation for the changes, 15 new employees have already been hired and trained in both customs matters and customer service.
At the same time the new regulations are expected to increase not only the volume of postal items that will have to be stored until the items are cleared through customs, because only then can they be handed over to customers, but also the number of items that will not be cleared through customs, and Latvijas Pasts has already provided additional premises for the storage of such items for a certain period of time. There may also be difficulties in situations where the data required for customs clearance of an item are missing, for example, it will not be possible to determine the value of the item, which will make customs clearance impossible. Therefore, Latvijas Pasts urges customers to take into account longer delivery times of items after the 1st of July, at least initially.
For more information on how to correctly clear postal items through customs see the State Revenue Service website.
Additional information:
Gundega Vārpa | Head of External Communications
E-mail: pr@pasts.lv; gundega.varpa@pasts.lv
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