E-commerce export: companies must remain in control of the final sale price

Cross-border (cross-border in terminology) e-commerce may have given the illusion of border-elimination to unimpeded trade. The reality is a little more complicated. Even in the EU, regulatory or financial aspects (VAT, etc.) should not be overlooked and should be carefully considered by electronic exporters. the challenge ? Controlling the selling price to the final consumer.

Alban Grossonfounder and director of Conex, a service provider specializing in The customs data processing and electronic transmission program explains the problem in an impressive way: The important thing for SMEs is not the platform, but the place of sale, in the EU or outside the EUexplained in an interview with moshi On April 5, inside the walls SITL . Lounge.In the EU, things are regulated and transparent, and we know where we’re going: there are platforms, there are ioss numbers, all you need from a tax standpoint to make it work well. From the moment you leave the European Union, the regulations of the destination country become “.

Thus, taking into account the customs duties and other taxes applicable in the destination country is not something that should be taken seriously by the electronic source, even if online marketplaces now offer an account for it. You will actually set the selling price to the end consumer, which is a strategic component.

He went, “These are not simple mechanisms when you have dozens of references” Observed Thierry GromoDirector of Transport and Logistics at GS1 France, during a conference under SITL on April 5.

Control your selling price at the destination

But the seller must, in any case, Keep control of the selling price in the destination country.

Alban Grosson continues his demonstration: “If he sells a product to a Chinese buyer, he should know at what level the product will be taxed in China and what special regulations may apply; When he will determine the selling price, he should take this into account. Otherwise what is likely to happen? Upon arrival, the freight forwarder carries out customs operations, will issue his invoice and will give it to the recipient: if the price is higher, he can compete with the latter by saying that he bought the product from a site at that price and wants the goods at that price. Which is as many returns as possible“.

The Returns Management It can also be a new nuisance when they have to cross the border again: “In Germany return rates can be as high as 40% but that’s fine, it’s the EU, no customs duties; It’s more complicated if you cross the border: how to get customs dutiesquestioned in this regard Jerome Lagerie, Director of Category Operations at LVMH during the above-mentioned roundtable. “These aspects should be the subject of comprehensive reflection within the company“.

Experts know that to get the tariff classification of your product in most countries, you need its HS code, from the name of the global tariff designation.

When it is registered in the European Union, it can even take advantage of the trade preferences of countries with which it has signed free trade agreements, provided certain formalities are met (certificate of origin, registered exporter status, etc.) for which advice and support can be sought*.

Kristen Gilgi

to focus
How does it work in the European Union?

No more customs exemptions for low value packages from the EU or third countries: since 1Verse July 2021, VAT must be paid in the amount of 1Verse Euro in the country of consumption, e-commerce platforms are responsible. This major reform implemented at the EU level was accompanied by the creation of a comprehensive import VAT service, OSS-IOSS (for “One Store – One Import Store”), which allows payments to be centralized with a single national administration.

Two scenarios:

when importing. Therefore the importing company must have an IOSS tax number linking it to a member state: it will be able to fulfill its tax obligations to that member state alone, regardless of the goods’ final destination points. If it does not have an IOSS number, it will have to pay VAT in the member’s destination country, which means that once it has carried out its customs process, it will have to re-ship the goods in transit at the destination to take the tax into account.

You need an EORI identification number, which is a European customs identification, to get IOSS, which is tax data.

when exporting, things get more complicated: each third destination country, has its own regulations. Therefore it is necessary to calculate the selling price according to the possible destinations. And when the customer comes to your site, the tool should allow to specify their destination and take this into account in the selling price. Another solution: setting an international equilibrium selling price that applies to all countries.

* Useful contacts

– French Customs Business Consulting Units for the first approach: click here

European portal site Access2Marketwhich conveys a lot of information about trading preferences and allows you to find the HS code for your product: click here

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