State of play of the Customs-related aspects 21st meeting of the VAT Expert Group 11 February 2019

Main changes for low value consignments UCC Electronic data transmission will be required for: safety and security: entry summary declaration (before arrival of the goods) import: declaration for release for free circulation VAT customs declaration for each consignment, including with a value up to 22 €  

New VAT E-commerce rules with customs impact Date of application: 1/1/2021 New VAT E-commerce rules with customs impact Abolish import exemption for consignments of a value ≤ EUR 22 All distance sales from third countries to the EU are subject to VAT upon importation For consignments of a value ≤ EUR 150, the Import One-Stop Shop (IOSS) can be used to declare and pay the VAT All MS must compile a monthly listing containing: The IOSS VAT Id Nos mentioned in import declarations during the month (of any MSI) Per IOSS VAT Id No, The total value of imports exempted during the month Special arrangements, if IOSS is not used

Main issues for customs implementation Use of customs declaration with super-reduced dataset Use of Surveillance to produce the VAT monthly reporting Value threshold – definition of intrinsic value Form of customs declaration (including its impact on the return formalities) Use of pre-lodged CD with super-reduced dataset as a temporary storage declaration Other issues (e.g. Article 144 DA) Priority >> Amendments with IT impact

Super-reduced dataset – Article 143a-DA Concept: Use of super-reduced dataset as standard declaration (preferably as pre-lodged declaration) Scope: Goods subject to duty relief (Articles 23(1) and 25(1) DRR) Goods not subject to prohibitions & restrictions CPC 42/63 excluded >>only possible CPC is ‘4000’ Any declarant Any VAT scheme B2B, B2C and C2C relation Transitional period in view of the amended Article 278 UCC

Super-reduced dataset – State of play Legal proposal finalised by CEG-GEN on 14/01 Inter-Service Consultation finished on 05/02 Adoption foreseen before 15/03 Scrutiny period for Council and EP (2+2 months) Publication in Q2/Q3 2019 Entry into force on 20th day following publication Entry into application >> direct reference to VAT E- commerce directive implementation date

Super-reduced dataset – The dataset 1/6 Goods item number 1/11 Additional procedure code 2/1 Simplified declaration/ Previous documents 2/2 Additional information 2/3 Documents produced, certificates and authorisations, additional references 2/4 Reference number / UCR 2/6 Deferred payment 3/1 Exporter 3/15 Importer 3/16 Importer identification n° 3/17 Declarant 3/18 Declarant identification n° 3/19 Representative 3/20 Representative identification n 3/21 Representative status code 3/40 Additional fiscal references identification n° 4/8 Calculation of taxes – Method of payment 4/18 Value 4/19 Transport costs to the destination 6/2 Supplementary units 6/5 Gross mass (kg) 6/8 Description of goods 6/10 Number of packages 6/14 Commodity code – Combined Nomenclature code

Monthly reporting through Surveillance Obligation laid down in Council Directive (EU) 2017/2455 >> All MS must compile a monthly listing containing: The IOSS VAT Id Nos mentioned in import declarations during the month (of any MSI) Per IOSS VAT Id No, The total value of imports exempted during the month Solution: ‘Surveillance – SURVRECAP’ – no legal impediment Amendments to UCC-IA Annexes 21-01 (and 21-02) – New data elements D.E. 3/40 (IOSS number) D.E. 4/4 Tax base Annex B Amendments to UCC-DA (Annex B to ensure consistency with IA)

Intrinsic value I. Duty Relief Regulation (Regulation No (EU)1186/2009) VAT E-Commerce Directive (Council Directive 2017/2455) No legally binding definition available Compendium on DRR is used as guidance ‘intrinsic value' means the value of goods in themselves, excluding transport and insurance costs, as ascertainable by the customs authorities either from any relevant document or in the light of their experience. Questions: Any need to introduce a legally binding definition, if yes what should be the definition used? How should the intrinsic value be calculated? Which data element to use for capturing the intrinsic value?

Main conclusions from CEG-GEN 27 meeting on 14/12/2018 Intrinsic value II Main conclusions from CEG-GEN 27 meeting on 14/12/2018 Broad support for uniform and legally binding definition Definition should be clear, simple & practicable Legal solution and definition to be further analysed & discussed Relevance only for low value consignments Data element to capture the intrinsic value in the CD with super-reduced dataset: (new) D.E. 4/18 Value (Intrinsic value of the goods per item in the invoice currency)

Intrinsic value III. – The definition Definition used in the Compendium: ‘intrinsic value' means the value of goods in themselves, excluding transport and insurance costs, as ascertainable by the customs authorities either from any relevant document or in the light of their experience. Change in circumstances > boost of e-commerce > transport costs often offered free by online retailers or not separately indicated on the invoice >> new definition proposed: ‘intrinsic value' means the price actually paid or payable for the goods when sold for export to the customs territory of the Union Concept based on the transaction value

Intrinsic value IV. – The legal solution Need for clear definition – where? Options: Compendium – legally not binding, current content to be improved UCC-DA (Delegated Regulation 2015/2446) Duty Relief Regulation (Regulation (EU) 1186/2009) Combined Nomenclature (2019 version – in force as of 1.1.2020) VAT legislation

Additional issues I. Subjects requiring further consideration by PG-LVC Mainly procedural rules (relating to applicable formalities >> less IT impact) To be covered by 2019 DA amendment package (Q4-2019) Improved presentation of LVC-related Article(s)

Additional issues II. Declaration by any other act for IOSS goods Act of declaration is presentation to customs, using the super-reduced dataset Solution to be left at MS discretion (potential impact on wording of Article 143a DA) Under condition that Checking of IOSS number is ensured Annex 21-01 data sent to Surveillance Liability of the declarant Competent customs office Systematic use of CD in Article 143a DA as TSD, if pre- lodged Returns  

Thank you for your attention! DG TAXUD – Unit A2 E-mail: TAXUD-UNIT-A2@ec.europa.eu