The landscape of e-commerce and international shipping is constantly evolving, and businesses need to stay informed to ensure compliance and smooth operations. For U.S. sellers shipping goods to the European Union, significant VAT rule changes were introduced in July 2021. These regulations stipulated that all goods entering the EU valued at 150 Euros or less would be subject to Value Added Tax (VAT). Items exceeding the 150 euros threshold are subject to both VAT and duties. You can find more details on the initial changes in our previous post.
Adding another layer to these regulations, La Poste, France’s postal service, has announced further measures effective January 1st, 2022. These new rules extend VAT liability to online marketplaces in several scenarios, all revolving around the 150 euros value mark. Specifically, online marketplaces are now responsible for VAT collection in these instances:
- Business-to-consumer (B2C) shipments valued below 150 euros where the sale is facilitated by a marketplace not registered with the Import One-Stop Shop (IOSS) system.
- B2C flows under 150 euros that are ineligible for IOSS, such as goods with restrictions, prohibitions, or excisable items.
- Crucially, B2C flows exceeding 150 euros, reinforcing the existing rule.
For the complete details, you can refer to La Poste’s official statement here.
What does this mean for U.S. businesses shipping to France? The key takeaway is the reinforced importance of the 150 euros threshold. Sellers shipping goods to France need to be particularly aware of this value limit, especially for goods exceeding 150 euros. For items above this value, businesses will be required to collect VAT. To ensure compliance with French tax regulations, merchants will need to secure a French VAT identity number from the French tax authorities. This registration will enable them to remit the VAT collected from their transactions.
This announcement from La Poste raises important questions about the consistency and rollout of EU VAT rules. Historically, EU postal regulations are generally standardized across member states. The unilateral implementation by France, particularly with the rapid January 1st, 2022 deadline and the limited clarity provided to online sellers, prompts uncertainty. It remains to be seen whether France’s swift action will be mirrored across the EU. GlobalPost is committed to monitoring these developments closely and will provide further updates as they unfold. Stay tuned for more insights in the coming weeks as we navigate these evolving EU VAT regulations and the significance of the 150 euros threshold for international e-commerce.
