At the moment ebay UK is charging UK VAT on orders made by people who are outside of the UK. Technically this could be illegal. This makes ordering from ebay UK very expensive, if the order gets stopped by Greek customs and the order is worth more than 22 Euro.
In short, ordering valuable items from the UK with ebay, at the moment, is a non starter because you might get charged for VAT twice.
What is changing?
On the 1st of July, when you order from ebay, you will not pay any customs charges or any extra VAT when the goods arrive in Greece from outside of the EU.
Supposedly, from the 1st of July, it is going to become cheaper to import high value products from outside of the EU if you order through online marketplaces like ebay.
What happens at the moment? USA example
If you order a product costing 100 euro (excluding VAT) from the USA using an online market place like ebay
Delivery with Post Office
If the seller ships the order with post office when the order arrives in Greece there will be a delay while it is processed by customs. This could be from 1 week to 4 weeks.
The cost will be around +3% of the total order value (import duty), +24% VAT on the total order cost (including shipping), +17 euro (customs processing) for the paperwork.
Total cost 144.72 euro
What will (is supposed to) happen on the 1st of July?
The cost of the product on ebay will now include Greek VAT ie the product will be 24% more expensive.
There will be no customs charges ie no 17 Euro charge
The 3% import duty……. I am not sure what will happen here, how can the goods not pass through customs and yet paperwork is done to calculate the 3% total? (Let’s assume 3% still gets charged with no admin charge)
Total cost from USA after 1st of July 127.72 euro – 17 euro cheaper.
Ordering the same product worth 100 euro (excluding VAT) from the UK
At the moment
We pay UK VAT at 20% when we make the order on ebay
When the order arrives in Greece we pay the same “fees” (VAT, customs paperwork) as ordering from the USA except the 3% import duty.
Total cost 165 euro
From 1st of July
Total cost should be 124 Euro – 41 euro less
(In effect from the 1st of July, ordering from the UK, theoretically, should be the same as it if were in the EU)
Two things that can go wrong
There are two things that could stop this 1st of July change from happening.
Customs in EU
How will customs offices know if VAT has been charged and collected on the order? Specifically how will Greek/any EU country’s customs know if the product was ordered through ebay?
At the moment, I do not know how this could work.
ebay VAT system
Will the ebay system be up and running by the first of July?
Will sellers on ebay have the pricing and catalogues corrected by the 1st of July?
If not, their selling prices could still include the UK VAT so price is still wrong.
And if the price is still wrong, then customs in EU countries must still charge their national VAT as they do now.
There are two key moving parts to this July 1st change. And these moving parts are absolutely huge.
And if the ebay system is not working on July 1st then the customs system can not work either.
It all rides on ebay (and the online marketplaces in general) to have their systems working by July 1st. But how will customers and customs know if their systems are working?
As things stand at the moment ebay has told sellers to submit gross prices and their VAT rate by July 1st. What will happen to products/sellers where this new price list has not been submitted? To be continued….
What to do now?
At the time of writing we only have 7 days to go until the 1st of July.
Unless I really need the product I would probably hold off ordering until the 1st of July to see what happens with the VAT, specifically does changing the destination country in the ebay listing change the price to reflect the different VAT rate?
Having said that, if you are buying in Greece, from a seller in the EU, there should be no change to the current arrangements.