16.12.2022

WHAT TAXES DO WE OWE WHEN WE SEND AND RECEIVE A SHIPMENT

Hundreds of thousands of parcels are picked up and sent around the world every day, but with particular intensity and anticipation precisely on holidays. What is good to know in order to send and/or receive a shipment from another country without problems, explained experts from the "Customs" Agency.

Online shopping and e-commerce shipments

In mid-2021, the European Commission introduced changes to customs and tax legislation dealing with the taxation of postal and courier shipments subject to online trade. All shipments, regardless of their value, must be paid VAT at the rates in force in the Member State of the recipient, in order to put a sign of equality between the local trader and the online trader from abroad. The legislative changes have created mechanisms for taxing online shipments within the EU when the shipment travels from one member state to another, and in the customs area - when the shipment comes from a third country that is not a member of the EU. There is virtually no online purchase that doesn't incur tax in one way or another.

Personal parcels sent from one individual to another

These are the shipments that are not of a commercial nature and contain goods exclusively for the personal use of the recipient or his family. They are subject to customs clearance if the sender is outside the EU and the recipient is in the Union. They are tax-free if they are worth up to 45 euros.

However, when can the product or gift be too expensive for us?

The shipment can turn out to be very expensive if the recipient and the sender do not know the rules and have not done the math well. For example, if the customer only looks at the price of the item, it may look like a great deal, but with shipping and taxes, the balance can change dramatically. In addition, it should be borne in mind that with such online trading there may be problems and delays. For example, due to an error or missing documents, the recipient may have to pay VAT twice - once upon ordering and a second time upon arrival of the shipment, and then make claims with an unclear outcome, the Customs Agency specifies. Or not being able to pick up the package until it is clear who paid what in taxes and where. There may be a problem in general with the quality of the product, with its return, as well as with warranty support. All of these risks must be considered when trading online, especially with third parties.

Online trading customers should remember that:

- for all shipments up to 150 euros, VAT is paid, and for those over 150 euros, first duty is charged (a certain percentage that varies depending on the product and the country and is also included in the value for VAT), and then VAT.

- the value of the shipments includes their transport, that is, duty and VAT are charged not only on the price of the goods, but also on the delivery.

Both recipients and senders of personal parcels should be aware that:

Every shipment has some value, even if it is emotionally "priceless" items or "worthless" personal items. The value of the shipment is judged by its declared or insured value (this information is filled in by the sender). If he has over-insured, that is, he has declared an amount higher than 45 euros in order to ensure that the shipment does not disappear or to be adequately compensated in the event of a problem, it exceeds the limit and taxes will be charged. So suddenly the "free" parcel can start generating costs - for taxes and customs representation. This also applies if the parcel contains personal belongings of the recipient himself (even if he himself sent the parcel to himself to save on baggage fees on an airplane, for example). In such a case, assistance should be sought from the supplier (post or courier) to declare the real value of the used items.

For what reasons can our shipment be stopped by the customs authorities?

In fact, shipments are stopped by the customs authorities extremely rarely and for a short time - to carry out document control, control of the content, the declared value or if any fraud is suspected, the experts answer. In any of these cases, if the initial check shows indications of a problem, then customs officials immediately seek contact with the consignee of the shipment through the supplier, or in other words, the carrier.

In most cases, recipients think their shipment is "stopped" or "held" by/at/at customs when the shipment is delayed and they see a status associated with the word "customs" on the tracking. This is actually the part of the shipping process called customs clearance. This is actually a paper process and is the submission of a customs declaration for the particular shipment.

How is everything happening? The online merchant hands over the ordered goods to the carrier or supplier - post office or courier in his country. This first carrier, with the help of other carriers, passes the shipment to the final supplier, who keeps it in its warehouse until it ensures its free handover to the consignee. In this process, the customs is a control authority that must make sure that there is nothing prohibited or dangerous in the shipment and ensure that the taxes are paid, but how the whole process moves and how long the shipment will stay in the warehouse depends on the supplier - post or courier.

In general, customs clearance and the collection of government receivables is related to the electronic submission of a customs declaration by the supplier or recipient. If everything is in order with the customs declaration, within up to 24 hours the customs "release" the goods, that is, allow them to be sent to the recipient. In reality, how long it will take from the arrival of the shipment in the country (in the supplier's warehouse) to the submission of the customs declaration and from the release of the shipment to its actual delivery depends mostly on the work of the supplier and, in rarer cases, on the activity of the recipient (if he is required to submit any documents, for example). In the case of post offices, this process takes more time, and in the case of couriers or so-called express shipments - less time, but the two types of deliveries work with different prices for their services.

Unfortunately, customs are often approached by people who for one reason or another did not receive adequate information, including being misdirected by the seller. In most cases, however, it turns out that the processing process has not reached a submitted customs declaration at all, or vice versa, the goods have already "passed customs" but have not yet been delivered. Actually 1/1000 are the cases in which there are some problems with the customs declaration itself or with the goods and the customs requires additional documents, commented the "Customs" Agency.

From there, they advise recipients to urgently seek information from the supplier - post or courier, as they bear the overall responsibility for the shipment and must assist them throughout the process.

What cannot be sent and why?

There are different types of bans. Some are imposed by the carriers themselves and are related to the transportation of packages. Other restrictions come from customs or other institutions. In general, a problem arises when sending/receiving goods that are traded under special rules - for example, excise goods, weapons, medicines, gold and silver articles above certain limits, goods that are or look like cultural values. Special attention should be paid to food, for which the EU also has a special type of regulation.

Sending/receiving may be allowed under certain conditions - up to certain quantities, in the presence of certain documents, and in other situations it may be completely prohibited. It is best to seek information and ask questions on a case-by-case basis.

When asked what was strange, non-standard or prohibited in shipments, Lyudmila Georgieva, head of the Customs Bureau "Bulgarian Exchange and Sorting Center", answered that regarding online shopping, the most non-standard shipments recently contain certificates or certificates for purchased rights to stellar objects or certificates of ownership of parcels from other planets, as well as pieces of meteorites. It's also online shopping, an individual purchase, has a declared value, an invoice, and customs clearance. That is, even for such shipments, taxes are paid.

As for shipments that do not have a commercial nature or personal parcels, the most problematic are those cases where a high value is declared because of their emotional value. For example, photo albums and personal belongings of loved ones. However, the high value results in taxes being charged.

What happens if we declare that we are shipping one thing but actually ship something else?

The shipment is stopped and the case is clarified - is there a mistake or an intention, what is actually sent, can this product be sent or is it something prohibited and illegal. In any case, this creates problems for the recipient and delays the shipment.

Are there busier periods than others in terms of shipments?

The busiest periods for postal items are November (Black Friday) for e-commerce, as well as Christmas, New Year and Easter for personal items between individuals, Lyudmila Georgieva said.

Alexander Penev, head of the Sofia Airport Customs Bureau, pointed out that there is also an increase in courier shipments during the periods of holidays and discounts, but in general, their number is constantly high and increases every year.

As a trend - are numbers/volumes increasing or decreasing?

According to Lyudmila Georgieva, the trend in postal shipments is on the rise, due to the increase in electronic commerce. In the last year, only in the specialized bureau for postal items, about 40,000 import declarations for goods up to 150 euros are processed every month.

30-40 percent of the total number of customs declarations for import at Sofia Airport are for small shipments up to 150 euros - online trade and personal shipments. This means about 7,000-8,000 declarations per month, Alexander Penev reported.

As with postal and courier shipments, the countries from which the most shipments are ordered/sent to Bulgarian users (individuals) are China and the USA, and after Brexit - also Great Britain.