Posts

Today’s the Day: End of the EU VAT de minimis and the launch of the Import One-Stop Shop (IOSS)

Today (July 1) marks the latest major change affecting the complex world of cross-border eCommerce.

It sees the removal of the de minimis value whereby no VAT is paid on goods of a value of up to €22, making all imports subject to European Union VAT rates.

The VAT amount applicable is subject to the local VAT rate of the customer’s delivery country (destination country). The exemption from customs duties on imported goods below €150 will remain in place and will only be applicable on goods with an intrinsic value of more than €150.

To assist third country online retailers and marketplaces, the EU is simultaneously launching the Import One-Stop Shop – or IOSS for short.

The application of the IOSS portal is intended to facilitate a simplified process for the declaration and payment of VAT from either the EU or a non-EU country.

The message is simple – those who are best prepared will be the ones in pole position to secure and grow their cross-border eCommerce sales.

To implement the IOSS, businesses will have to register on the IOSS portal of any EU member state. This electronic portal will hold businesses responsible for charging and collecting VAT, meaning the consumer will be charged VAT at the point of purchase, subject to their local VAT rate.

With this in place, it will enable quicker clearance times at border control, leading to efficiency gains and cost savings for businesses. Just as important, it will ensure high levels of consumer satisfaction, avoiding the issue of any doorstep shocks.

If a business is non-EU based, it will have to appoint an EU-established intermediary to fulfil its VAT obligations of collection, payment and declaration of VAT under IOSS. This intermediary, or VAT agent, will represent them with the IOSS portal and will share the responsibilities of the supplier for return submissions of VAT payments under the IOSS scheme.

Once registered on the IOSS portal, a unique IOSS identification number will be assigned to you. This number will need to be put on all packages under €150 sent to the EU. VAT will then need to be calculated and charged to the customer at the point of purchase with the invoice submitted with the package at customs. IOSS returns must be filed on a monthly basis either directly or through the intermediary and a record kept by the business.

EU goods eligible for relief

As the IOSS is not mandatory, if a business chooses to opt out of registering to the online portal, their cross-border operations may face challenges. Since they are not registered, VAT will not be charged or collected at the point of sale, meaning consumers will have to pay this fee at the point of import.

This may lead to delayed clearance of the consumer’s goods and unexpected fees of import VAT or other handling fees being charged.

Faced with these additional charges, consumers may refuse to pay to have their goods released from customs resulting in an unpleasant and unsatisfactory experience for the consumer and a potential loss to the business. It will also make the consumer less likely to return to the online seller in the future.

The changes to EU VAT are primarily about creating a level playing field and fair competition between EU and non-EU eCommerce players. Major cross-border trading countries such as China, the US and the UK will be among those most impacted by the changes.

Hurricane has been working closely with its customers, including postal operators, carriers, retailers and marketplaces, enabling them to be ready for July 1.

The provision of complete and valid product and shipment data is essential in order to make use of the IOSS and to take advantage of the simplified process that the new portal allows.

But while many businesses have undoubtedly put in place robust processes and systems to meet the new requirements, many others will be playing catch-up over the coming weeks and months as they come to realise the disadvantages of not being prepared.

 

EU VAT changes and the Import One-Stop Shop (IOSS): An opportunity for growth

It is now exactly a month until the EU VAT Package and the Import One-Stop Shop (IOSS) come into effect.

July 1 is the next major milestone for businesses committed to growing their cross-border eCommerce operations.

Events including Brexit and the US STOP Act have already highlighted this year the importance of having the highest quality product and shipment data in order to achieve the smoothest possible delivery and customer experience.

For third country online retailers and marketplaces selling into the EU, the looming EU VAT Package will further intensify this requirement. For global leaders in international eCommerce like China and the UK, these are quite simply the most significant event in their calendar in 2021.

From July 1, the EU will remove the exemption from VAT on low value goods with a value of less than EURO 22.

The EU is also making third country online retailers and marketplaces responsible for the collection and remittance of VAT.

To support retailers and marketplaces, the EU has created the Import One-Stop Shop (IOSS) with the intention of simplifying the declaration and payment of VAT on distance sales with an intrinsic value of less than EURO 150.

These are substantial changes and are intended to level the playing field between EU retailers and marketplaces and their counterparts in other parts of the world, most notably China.

It is also intended to have the same impact on postal operators and express carriers.

Any marketplaces uncertain about whether to opt into the IOSS should note the decision of Amazon to embrace the new system for both its retail activities and marketplace businesses. Several other major marketplaces are believed to be actively moving in the same direction.

Hurricane Commerce has produced a guide to the EU VAT Package and the IOSS to help retailers, marketplaces and their logistics partners to take advantage of the opportunities presented by the new rules.

Hurricane is also one of Royal Mail’s partners in providing support to its customers with the IOSS – https://www.royalmail.com/business/international/guide/delivered-duties-paid

Among the key things you need to know are:

  • The retailer or marketplace (or their chosen intermediary) only needs to register on the IOSS portal of one EU member state. Registration opened on April 1, 2021;
  • IOSS makes the buying process easier for the consumer with VAT being paid at the point of purchase – thereby avoiding doorstep surprises when goods are delivered;
  • If the seller does not use the IOSS, the consumer will have to pay VAT at the point of import – with resulting delays in clearance and delivery and greater likelihood of returns;
  • The use of the IOSS will result in much greater efficiency gains;
  • Electronic customs clearance also requires only the so called Super Reduced Dataset, resulting in faster clearance, shorter transit times and reduced costs.

Online retailers or marketplaces which do not have a presence in the EU will need to appoint an intermediary in at least one EU member state.

The intermediary will be responsible for the declaration and payment of VAT to the tax authorities of the member state on the basis of a monthly IOSS VAT return.

They are also responsible for keeping records that have to be made available electronically upon request.

Of critical importance is the need for the retailer or marketplace to be able to provide complete and valid electronic data for customs clearance.

If using the IOSS, this will mean complying with the requirements of the Super Reduced Dataset, including accurate product descriptions and HS6 codes.

Various attempts to delay the introduction of the IOSS have been firmly rejected – no surprise as we emerge from the pandemic with governments around the world under huge pressure to maximise their tax revenues.

But while preparation is needed to be able to access the IOSS, it should be seen as a big opportunity to secure substantial cross-border eCommerce growth.

By registering and meeting the requirements, particularly around the provision of high-quality product and shipment data, companies will have a significant advantage over their competitors.

This will include faster customs clearance and delivery, greater efficiencies, reduced costs and enhanced customer experience.

To access a copy of Hurricane’s EU VAT and IOSS brochure, email: info@hurricanecommerce.com

https://tamebay.com/2021/06/why-eu-vat-changes-and-ioss-should-be-opportunity-for-growth.html

Hurricane Commerce selected as partner for ETrak delivery management system

Hurricane Commerce has been chosen as the landed cost engine partner for ETrak, the delivery management system powered by Parcel Monkey in partnership with The Delivery Group.

ETrak provides cost-effective, tracked delivery solutions for sending packets and parcels worldwide, enabling eCommerce merchants to scale while keeping costs to a minimum.

The recently launched platform has access to a global network of postal and commercial carriers in over 220 countries.

By partnering with Hurricane Commerce, ETrak is able to provide its retailer customers with a Delivered Duty Paid (DDP) solution.

ETrak has integrated Hurricane’s Aura API which allows merchants to calculate duties and taxes on shipments via a landed cost engine. Aura can also screen for prohibited and restricted goods and denied parties.

Providing a DDP solution is becoming increasingly important as retailers, marketplaces, postal operators and carriers face multiple regulatory challenges including Brexit, the Import One Stop Shop (IOSS) and the US STOP Act.

The ETrak landed cost engine enables retailers to be fully transparent with consumers at checkout about duties and taxes that are payable – avoiding any doorstep surprises.

Martyn Noble, CEO of Hurricane Commerce, said: “We are delighted to have been selected as the landed cost engine partner for the ETrak delivery management system.

“Parcel Monkey in partnership with The Delivery Group are committed to providing their customers with the best possible experience which, in turn, will enable their customers to achieve substantial growth in their cross-border eCommerce trade.

“The fast-moving regulatory landscape is providing retailers, marketplaces and carriers with significant challenges, but the international growth opportunities are vast for those who put in place the best possible processes and systems.

“Pivotal to this is the need to ensure that packets and parcels have complete and valid electronic data and that online retailers are able to be transparent with their customers about the duties and taxes that are payable.”

Chris Tayler, Head of ETrak, said: “Our mission at ETrak is to provide simplified international parcel delivery solutions for eCommerce businesses and being able to offer a DDP solution to our customers is essential to this mission.

DDP delivery gives retailers greater flexibility for handling customs duties and taxes and provides a better shopping experience for the end customer, therefore improving customer loyalty and retention.

We selected Hurricane Commerce as our partner because their Aura solution provides a best-in-class landed cost engine to calculate duties and taxes, enabling us to accurately calculate the customs fees on any shipment, regardless of the importing country.”

 

Hurricane in the media:

Post and Parcel Technology International – ETrak partners with Hurricane Commerce to deliver Parcel Monkey solution

CEP Research – ETrak selects Hurricane Commerce solution

Tamebay – ETrak select Hurricane Commerce to power Delivered Duty Paid solution

Apex Insight – ETrak to use Hurricane Commerce for DDP solution

Parcel delays loom as STOP Act and ICS2 hit on March 15

Postal operators are bracing themselves for the biggest date in their calendar this year.

Next Monday (March 15) sees the enforcement of the US STOP Act and the European Union’s Import Control System 2 (ICS2).

The STOP Act had originally been due to come into full effect on January 1 until it was moved to March to give US Customs and Border Protection more time to prepare for the regulations.

The Act requires postal operators to provide a higher level of advance electronic data (AED) than had previously been necessary.

ICS2 is also aimed at postal operators and requires entry summary declarations to be submitted on parcels coming into and through the EU.

Cross-border eCommerce specialist Hurricane Commerce’s technology is enabling postal operators across the globe to meet the new requirements for complete and valid data including product descriptions, HS6 codes and country of origin.

Martyn Noble, Hurricane’s CEO, said: “March 15 is the biggest date in the diary for postal operators this year and the level of preparedness varies from one authority to the next.

“But the stark reality is that, as of next Monday, postal operators and their customers will need to produce complete and valid data on their eCommerce shipments.

“We have already seen the impact of a lack of quality data on parcels since Brexit on January 1. The STOP Act and ICS2 are the next major challenges and then we have the introduction of the EU VAT reforms in July.

“With the Coronavirus pandemic continuing to place huge pressures on air freight capacity, the supply chain industry cannot afford delays, returns and additional storage, not to mention the associated extra costs.

“In December, we predicted that a lack of readiness for the STOP Act could result in several hundred million shipments being held up and we believe this remains the case. This is without adding in the impact of ICS2 with the onset of much greater scrutiny.

“The cross-border eCommerce landscape has changed for good, but those postal operators which get their data right will be able to meet these challenges and achieve scale.”

Hurricane’s solutions were specifically developed to enable customers to meet the challenges of the new regulations.

Hurricane’s Zephyr data enhancement API allows bulk clearance facilities to check, find and populate additional or missing data including product descriptions and HS6 codes.

Meanwhile, its Aura API covers three other critical cross-border functions – duty and tax calculation, prohibited and restricted goods screening and denied parties screening.

The company was established in 2016 and clients include Australia Post, An Post, SEKO Logistics and Lenton Group. Postal operators can access Hurricane’s solutions direct or via the IPC’s Dynamic Merchant Platform (DMP) and UPU.

 

Hurricane in the media:

Parcel and Postal Technology International – Parcel delays loom as STOP Act and ICS2 hit on March 15

Post and Parcel – Parcel delays loom as STOP Act and ICS2 to hit next Monday

Lenton Group selects Hurricane Commerce’s Duty and Tax calculator for global shipments

Lenton Group, the global logistics and transport provider, has announced a partnership with Hurricane Commerce.

Lenton Group has selected Hurricane’s Duty and Tax calculator to support the launch of its Delivered Duty Paid (DDP) solution and its commitment to a seamless cross-border trade experience for its eCommerce customers.

The Duty and Tax calculator is available through Lenton Group’s Hub-Ez, a one-stop logistics platform for online sellers, marketplaces and others involved in cross-border eCommerce.

Establishing the partnership with Hong Kong-headquartered Lenton Group will form an integral part of Hurricane’s expansion into Asia Pacific.

The company was founded in 2016 to provide postal operators, carriers, merchants, marketplaces and platforms with a suite of solutions to enable clients to achieve frictionless eCommerce trade in the face of ever-increasing global regulation.

Hurricane’s industry-leading APIs cover data enhancement, duty and tax calculation, prohibited and restricted goods screening and denied parties screening.

Lenton Group’s Alex Langslow said: “We are pleased to announce our new partnership with Hurricane Commerce, allowing all our customers access to a leading platform for calculating duties and taxes for international shipments around the world.

“The Duty and Tax calculator is available on our online portal, Hub-Ez, and will be integrated into many of our upcoming products.

“eCommerce is a fast-growing and rapidly evolving part of the Lenton Group business and partnering with best-in-class technology companies like Hurricane is an important part of our strategy.”

Martyn Noble, CEO of Hurricane Commerce, said: “We are delighted to be partnering with the Lenton Group and for our solutions to be playing a critical role in ensuring the seamless cross-border trade of their customers’ international shipments.

“Major events like Brexit, the US STOP Act, ICS2 and EU VAT reforms mean that complete and accurate data on eCommerce parcels has never been more important than it is today.

“Hurricane’s leading-edge technology solutions have been specifically designed to simplify the complex and ensure frictionless cross-border trade.”

 

For more information on the Lenton Group’s services, click the image below:

 

 

 

 

 

Hurricane in the media:

Tamebay – Lenton Group announces partnership with Hurricane Commerce

Post and Parcel – Lenton Group and Hurricane sign a cross-border e-commerce partnership

Parcel and Postal Technology International – Lenton Group selects Hurricane Commerce’s Duty and Tax calculator for global shipments

Multi Channel Merchant – Lenton Group Selects Hurricane Commerce’s Duty and Tax Calculator for Global Shipments

Apex Insight – Lenton Group to use Hurricane Commerce duty and tax calculator

Air Cargo Week – Lenton Group partners with Hurricane Commerce

Hurricane Tamebay Webinar

Hurricane to discuss impact of March 2021 regulations in Tamebay Webinar

March 15th should be etched in the diaries of anyone involved in cross-border eCommerce.

Two major regulatory events – the US STOP Act and ICS2 – come into force on this date.

Both will require cross-border traders to ensure they are providing complete and valid electronic data on their parcels.

Without it, several hundred million parcels are likely to get stuck at customs leading to increased costs, delays and, worst of all, reputational damage with customers.

The Tamebay webinar on March 15 will hear from Hurricane’s Martyn Noble and Bram Buijs. They will explain more about these and other regulations impacting cross-border eCommerce in 2021 and, crucially, what it means for businesses.

We’ll explain the critical importance of having complete and valid data (including HS6 codes, product descriptions, country of origin etc.) and also ensuring you are screening effectively for prohibited and restricted goods and so called denied parties.

This webinar is a must watch for merchants, marketplaces, carriers and anyone else involved in the cross-border supply chain.

To register for this event, follow the link below –

 

Hurricane Commerce helping merchants to meet the regulatory challenges of 2021

eCommerce merchants are having to face up to a swathe of regulatory challenges impacting their ability to carry out cross-border sales.

So far this year, online retailers have had to deal with the fallout from Brexit and, on March 15, full enforcement of the US STOP Act will finally happen.

The EU are also removing the low value VAT threshold on goods under €22 in July of this year.

The impact of these measures means that merchants will need to provide complete and valid data for their parcels. This includes accurate product descriptions, commodity codes and country of origin information.

Failure to do so will result in huge delays at customs, additional costs and customer dissatisfaction.

Hurricane Commerce, a cross-border tech specialist, is working with merchants, marketplaces, postal operators and carriers, providing them with a range of solutions.

Hurricane’s APIs provide customers with solutions covering data enhancement, duty and tax calculation, prohibited and restricted goods screening and denied parties screening.

Magento merchants can access the Hurricane extension on the Magento Marketplace.

Merchants can use Hurricane’s bespoke AI classification engine Bluestone to ensure their products have the right descriptions and HS6 codes along with its Aura solution, the API that covers duty and tax calculation, prohibited and restricted goods screening and screening for denied parties.

eCommerce merchants not on Magento can partner directly with Hurricane to integrate the solutions they need to ensure they are fully compliant and able to take full advantage of cross-border opportunities.

Martyn Noble, CEO of Hurricane Commerce, said: “The regulatory landscape for cross-border eCommerce has changed significantly since the start of 2021.

“But those who meet the challenges head on, and put in place the best possible systems, will be ideally placed to achieve success.”

More details about Hurricane’s extension can be read here: https://marketplace.magento.com/hurricanecommerce-module-duty-tax-compliance.html

Will Brexit and the STOP Act kill cross-border eCommerce?

Is seamless cross-border eCommerce a thing of the past?

Hurricane co-founders Martyn Noble and David Spottiswood chat to the Postal Hub’s Ian Kerr about what’s happening and how complete and valid electronic data will determine the winners and losers in the world of online trading.

To listen to the podcast, follow this link to the Postal Hub Podcast: http://www.thepostalhub.com/podcasts/episode-226-cross-border-ecommerce-brexit-ics2-stop-act-hurricane

 

Video – Hurricane’s David Spottiswood talks to Daily Mail Online about Brexit parcel chaos

Hurricane’s David Spottiswood spoke at length to the Daily Mail Online about the parcel chaos unfolding since Brexit Day.

He also explains how Hurricane’s solutions are helping online retailers, postal operators and carriers get on top of the problem.

The key is having complete and valid data on your parcels if you want them to get through customs.

It’s also about being transparent with consumers about duty and tax and any other fees they are likely to face in order to receive their goods.

Postal operators face “double whammy” of STOP Act and ICS2 on March 15

Postal operators face a “hugely challenging” eight weeks after being told that full enforcement of the US STOP Act will now take effect on the same day as the EU’s ICS2.

Both regulations require postal authorities to provide advance electronic data on mail parcels entering the US and EU respectively.

The US STOP Act had been due to come into full force on January 1, but Senator Rob Portman reluctantly granted an extension to March 15 after hearing that Customs and Border Protection needed more time to finalise regulations.

However, Senator Portman made it clear that no further delays would be acceptable, saying: “Congress cannot provide this type of extension on packages without identifying data entering the United States again.”

He also highlighted how other countries including France, Spain and Germany have started to require identifying data ahead of the implementation of ICS2 on March 15.

Portman said: “Packages entering those countries without identifying data will be delayed or considered inadmissible and returned to sender.  Further, starting

March 15, the European Union will require identifying data on a package before it is loaded onto a plane for shipment.”

Hurricane Commerce, a cross-border

eCommerce technology specialist, warned before Christmas that the STOP Act enforcement would result in several hundred million mail parcels destined for the US being rejected if they have incorrect or incomplete data. Refused parcels would be returned to their country of origin triggering extra costs for returns, warehousing and storage as well as huge customer dissatisfaction.

Martyn Noble, CEO of Hurricane Commerce, said: “On the one hand, Senator Portman’s extension to March 15 gives postal operators a little more time to get prepared.

“But with the full enforcement of the STOP Act now coinciding with the implementation of the EU’s ICS2 on the same day – March 15 – it is a real double whammy and presents posts with a hugely challenging eight weeks to ensure they are able to meet the higher threshold of advance electronic data.

“There is now the very real prospect of hundreds of millions of parcels being rejected into the US and EU from March 15.

“Those postal authorities which are fully prepared for the greater requirements around AED will not only be compliant but will also put themselves in the driving seat to capitalise on the continuing exponential growth in cross-border eCommerce trade.”

Martyn added: “This is not just about the postal authorities as the data starts with companies that are selling their goods internationally on their own websites or via marketplaces. Data needs to be complete and correct at the point of sale to ensure that the end customer receives the service they expect.”

Hurricane has developed a suite of APIs that meet the needs of postal operators, carriers, eCommerce merchants, marketplaces and platforms.

Hurricane’s Zephyr data enhancement API allows bulk clearance facilities to check the accuracy of data including product descriptions and HS6 codes, and receive additional pertinent or missing information all under a single quick check function.

Zephyr can process over 700 million requests a day and can, on an item by item API call base, provide for a real time feedback with response times of 100 milliseconds. The screening of a file consisting of a maximum of 10,000 items that is sent to Hurricane takes no more than 15 minutes.

Meanwhile, its Aura API covers three other critical cross-border functions – duty and tax calculation, prohibited and restricted goods screening and denied parties screening.

 

Hurricane in the news:

A Gathering Storm for Parcel Post Importers Into the US and Europe – Handy Shipping Guide

STOP Act and ICS2 “double whammy” to hit Postal operators on 15th March – Tamebay