Photo for illustration (Source: VOV)
Online B2C transactions to the EU will be subject to value added tax from July 1
The move will see goods originating from a third country subject to VAT, whilst they must also conduct customs declarations when being imported to the EU market as of July 1.
At present, EU members have established the Import One Stop Shop (IOSS) System aimed at conducting customs clearance for online transactions valued at EUR150 or less.
Nguyen Thi Minh Huyen, deputy director of the Department of E-commerce and Digital Economy, said the latest regulations will contribute to the development of e-commerce transactions and serve to create an equal competitive environment among various businesses both inside and outside of the EU.
However, amid growing e-commerce transactions, the new EU rule will affect both EU consumers and businesses who process B2C transactions via online platforms or from a third country outside of the EU.
Furthermore, with the EU's VAT calculation method, local firms are anticipated to face a number of hurdles when exporting their agricultural products or goods to the EU market moving forward.
Huyen noted that the new regulation is expected to lead to higher costs for e-commerce transactions, thereby leading to numerous difficulties for businesses.
The European-American Market Department has therefore advised local online sellers to apply for business registration in an EU member state in the event they wish to sell products to the EU, while simultaneously declaring transactions according to the IOSS website of each member state./.