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Influence of EU VAT Reform on Dropshippers

The article below is from AliExpress and talks about the EU VAT Reform in AliExpress.


1 A brief introduction of new VAT regulation in the EU

1.1 Major Changes:

Effective on July 1st, 2021, the following changes will apply to orders shipped to the EU from outside the EU: • Remove the current exemption for importing goods under EUR 22. It means that all goods imported to the EU will be subject to VAT on and after July 1st. • For goods valued at less than EUR 150, AliExpress will be responsible for collecting VAT from consumers in accordance with EU tax laws and paying VAT to the Customs Office; • For goods valued above EUR 150, VAT and duties are still levied by the customs at the time of importing.

Influence of EU VAT Reform to Dropshippers - DSers


2 Changes of AliExpress related rules

2.1 To general customers

• If the goods are shipped directly from outside the EU to EU buyers, and goods are valued at less than EUR 150, VAT will be collected and paid by AliExpress. • Buyers can see the specific VAT on the checkout page.

2.2 To business buyers

AE verified business buyers have to declare and pay VAT on their behalf. AE will not collect and pay VAT for business to business sales. How to be recognized as an eligible EU business buyer? ① Access the VAT declaration link on the My AliExpress page. ② Submit VAT information. ③ Wait for AE to verify VAT information.(One business day) ④ Once confirmed, AE will no longer collect and pay VAT when the buyer places an order. ⑤ Once a buyer is a verified EU business buyer in one European country, AE will consider the buyer as a business buyer in all applicable EU countries. Import VAT will not be collected. ● The feature will be available around June 14, 2021.

Influence of EU VAT Reform to Dropshippers - DSers
Influence of EU VAT Reform to Dropshippers - DSers
Influence of EU VAT Reform to Dropshippers - DSers


3 Influence on dropshippers

3.1 VAT-registered dropshippers

• AE will not charge EU VAT, the dropshippers have to declare and pay VAT on their behalf. • After verifying the VAT information, the identity of the dropshipper will be "Business Buyer" of AE. AE will not use the tax number of its platform during customs clearance. • The consignee therefore has the risk of being charged VAT. AE is not responsible for the consequences caused by delayed VAT payment from a verified Business Buyer. Possible consequences: a. Customs will not release the parcel. b. The customs will directly contacts the consignee to charge VAT based on actual goods value. c. Others.

3.2 Dropshippers who are not verified as Business Buyers

•AliExpress will collect and pay VAT. •The VAT invoice can be downloaded from My AliExpress page.


4 Merchandise prices display
Influence of EU VAT Reform to Dropshippers - DSers

Details of the product page:

Influence of EU VAT Reform to Dropshippers - DSers

Checkout page:

Influence of EU VAT Reform to Dropshippers - DSers


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