Interim report of the Customs 2020 Project Group on Export and Import Formalities related to Low Value Consignments Agenda item 4 VAT Expert Group 23rd meeting – 24 September 2018

About the PG I. Context Mandate UCC introduced new provisions for the customs clearance of low value consignments VAT e-Commerce Package Exponential growth of e-commerce – ongoing developments at international fora Mandate To provide technical assessment and analysis of issues related to import and export customs formalities for clearing low value consignments. To ensure a level playing field among economic operators that are in charge of the respective import and export processes and procedures. To maintain and ensure coherence and consistency between all customs processes and procedures associated to the entry, import, export, and exit of goods into and out of the EU.

About the PG II. Composition Working methods & Reporting 11 experts from Member States Customs administrations; 5 postal operators; 3 express couriers; 3 other trade representatives and NGO with specific activities related to e- commerce. Working methods & Reporting 5 meetings in Brussels Reporting to CEG-FOR

Scope Consignments that contain goods whose intrinsic value is not exceeding respectively: at import: EUR 150, at export: EUR 1 000 Consignment: goods dispatched simultaneously by the same consignor to the same consignee and covered by the same transport contract

Structure Findings & Recommendations Short term – import of goods with an intrinsic value not exceeding EUR 22 Short term – import of goods with an intrinsic value between EUR 22 and EUR 150 Export Proposed actions for the medium term Short term: period until the expiry of the respective transitional period provided for in the TDA Medium term: Period after the transitional period and/or areas to be addressed in phase II of the PG

Short term – Import I. Goods ≤ EUR 22 Findings: Legal provision: Article 141(5) of UCC-DA Scope: all goods with an intrinsic value ≤ EUR 22 Form of customs declaration: declaration by any other act Validity: during the transitional period (until the upgrading of the National Import Systems) the end of the transitional period is not linked to the removal of the VAT de minimis threshold (entry into force of new VAT rules) and/or the deployment of ICS-2 (availability of electronic advanced data). The actual end of the transitional period may precede the dates foreseen in i. and ii. No duty & VAT to be collected Impact on capacity of national import systems Different treatment of EO (post <> other EO)

Short term – Import II. Goods ≤ EUR 22 Recommendations: amend Article 141(5) UCC-DA with a view to extend its application until the entry into force of the VAT E-Commerce Package, and clarify the use of a declaration by any other act is also possible following temporary storage or transit in a guidance. Proposed legal amendment to Article 141(5) UCC-DA: "5. Until the date the amendments to Directive 2006/112/EC, as provided for in Article 2 to Council Directive (EU) 2017/2455 of 5 December 2017 take effect, goods the intrinsic value of which does not exceed EUR 22, shall be deemed to be declared for release for free circulation by their presentation to customs pursuant to Articles 139 of the Code, provided that the data required are accepted by the customs authorities."

Short term – Import III. Findings: Recommendations: EUR 22 ≤ Goods ≤ EUR 150 Findings: Legal provision: Article 141(3) of UCC-DA Scope: postal consignments with an intrinsic value ≤ EUR 150 and subject to customs duty relief Form of customs declaration: declaration by any other act Validity: not limited (to the transitional period) Impact of VAT e-Commerce Package Recommendations: maintain the current legal framework for the import customs formalities of goods with an intrinsic value between EUR 22 and 150 and further analyse the legal provisions applicable to such customs formalities in view of the implementation of the VAT E-Commerce package

Proposed actions for the medium term VAT E-Commerce Package Proposed actions for the medium term Data exchange Availability of advance electronic data is key Risk assessment (non-fiscal & fiscal) prior to arrival of goods Potential re-use of ENS data IT requirements Update of national import systems Potential update of SURV-RECAPP (monthly reporting for VAT-IOSS) VAT-IOSS database with interface to customs systems.

Proposed actions for the medium term II. 'Super-reduced' dataset I. – Objective Proposed actions for the medium term II. To identify a unique dataset that facilitates the customs clearance for release for free circulation of the goods; contains sufficient information to enable a proper customs supervision and control of goods; the calculation of the VAT and/or enable the identification if VAT has been prepaid under IOSS; ensure a level playing field between all economic operators (dataset could be used by any declarant); is based on existing datasets in Annex B (H6) and takes into account data availability to the declarant; considers existing international standards in the field of electronic exchange of data (e.g. the content of the ITMATT message, or the possibility to re-use the ENS data for customs declaration); considers the possibility to use this customs declaration as ENS, as foreseen in Article 130 UCC.

Proposed actions for the medium term III. 'Super-reduced' dataset II. – Scope Proposed actions for the medium term III. Any goods which benefit from a relief from import duty in accordance with Articles 23 to 27 of Regulation (EC) No 1186/2009 (B2C and C2C consignments); subject to any scheme applied for the calculation and collection of VAT (IOSS, special arrangements and standard procedure where VAT is calculated upon the release for free circulation of the goods); declared by any person (postal operator, other economic operator, private person etc.); with exception of goods covered by Article 142 of UCC-DA (e.g. P&R goods, goods subject to other formality required under EU legislation).

Proposed actions for the medium term IV. 'Super-reduced' dataset III. - Data requirements Proposed actions for the medium term IV. Goods item number Additions and deductions Authentication (signature) Invoice currency Additional procedure code Total amount invoiced Documents produced, certificates and authorisations, additional references Item price/amount Gross mass (kg) Description of goods Reference number/UCR Number of packages Consignor 6-digit CN code Consignee Type of goods Declarant Representative Representative status code Additional fiscal references ID (VAT-IOSS number)

Proposed actions for the medium term V. 'Super-reduced' dataset IV. - State of play Proposed actions for the medium term V. The super-reduced dataset was presented at CEG- FOR 05 meeting on 7+8 June 2018 held jointly with TCG The concept was appreciated and endorsed by CEG- FOR Further discussions to fine-tune the dataset and ensure consistency with UCC Annex B and the EU Customs Data Model (EUCDM) continue in dedicated CEG Section >> Data Integration and Harmonisation (17 September 2018)

Proposed actions for the medium term VI. Main issues for further discussion by PG LVC Proposed actions for the medium term VI. Form of the customs declaration Need for a formal declaration (electronic declaration <> declaration by any other act where the act of the declaration corresponds to the presentation of goods) VAT requirements (monthly reporting obligation under IOSS >> use of SurvRecapp) Reuse of ENS data / data availability Return of goods Complex and cumbersome processes for return & repayment of import duty Potential increase in volumes following the abolish of EUR 22 de minimis threshold Different legal approach for postal consignments and other goods at the moment >> analyse need to amend the scope of Article 220(2) of UCC-IA (all goods <> goods in scope of the VAT e-Commerce Package) Impact of the form of customs declaration

THANK YOU FOR YOUR ATTENTION! DG TAXUD – Unit A2 E-mail: TAXUD-UNIT-A2@ec.europa.eu