What will electronic commerce look like in 2021 and beyond? EU4Digital eCommerce awareness event highlights upcoming changes

The eCommerce Awareness event on ‘eCommerce changes in 2021 and beyond: what to expect and how to prepare the Eastern partner countries’, organised by the EU4Digital Facility as part of its networking activities, took place on 21 May 2021. 

Over 70 different participants including ministries, customs authorities, postal operators, marketplaces and business association from all six Eastern partner countries took part in the event. The main goal of the event was to raise the awareness about the upcoming changes and new rules for distance sales that are taking effect starting 1 July 2021 as part of the European Commission’s 2021 VAT e-commerce package. 

The event was opened by EU4Digital Team Leader Arturas Piliponis, who discussed the trends and drivers that are currently shaping the EU eCommerce landscape. Among the key trends mentioned were the increase in competition among online players, growing importance of customer experience and fulfilment of orders and delivery, as well as growing marketplace dominance. 

The participants were also introduced to the EU4Digital Facility, its key activities and goals (learn more about the thematic areas and their goals here). EU4Digital Deputy Team Lead Ruta Salvyte-Tamosiuniene focused on the key eCommerce activity outputs – eCommerce EU Baseline, a list of recommendations for eCommerce harmonisation, as well as the ongoing pilot and its benefits.  

The key 2021 changes in the areas of customs and taxes were presented by Walter Trezek – Chairman of UPU Consultative Committee / Ecommerce Europe: Co-Chair of the eLogistics Working Committee. Mr.Trezek highlighted the most important changes that will be introduced in July 2021: 

• All goods will have to be declared digitally in advance (before physical delivery of a parcel)
• VAT has to be collected on all goods no matter their price (end of <22 EUR threshold).
• One Stop Shop (IOSS) system will be introduced to provide an opportunity to collect cross-border VAT at the point of sales (e.g. on e-shop, marketplace). 
• All imported consignments will have to be covered by the electronic product safety and transport security and customs declaration.
• Reduced dataset for Low value consignments (<150 EUR) becomes available not only to the post, but also to courier, express and parcel operators in the private sector.

Additionally, the impact of the 2021 changes were also discussed from a logistics perspective by Jan Hyttel, Board member of GS1 Lithuania and Transport Innovation Association. The expert explained how the export and import process will change after the new rules and regulations are adapted: after 1 July 2021, the logistical lines might get consolidated (i.e. goods will go straight to the EU destination country, versus declaration in bulk in one EU member state at the point of entry). 

In the context of the upcoming changes and possible solutions to address them, EU4Digital expert Volodymyr Kovalenko presented the ongoing EU4Digital eCommerce pilot – its solution (Picture 1 below) and future potential, more specifically its benefits in:

• Strengthening eCommerce ecosystem and increasing eCommerce volumes;
• Addressing the existing challenges for cross-border eCommerce trade;
• Increasing the awareness and support to prepare to the 2021 eCommerce VAT package introduced in the EU.
  

You can read more about the pilot concept and its benefits here.

Attention was also drawn to the Ecommerce Europe association and its role in such pilot initiatives between the EU and the Eastern partner countries. Florian Seikel and Toralf Schneider – representatives from logistic-natives e.V. (a member of the Ecommerce Europe association) – emphasised the key reasons of the association to participate in the eCommerce pilot as well as the benefits that the association gets from such initiatives (such as the opportunity to establish connections as well as to build awareness about eCommerce developments, and get a practical exchange of experience). Representatives also focused on explaining how the association can support businesses aside from the pilot project by strengthening cooperation and networking.  

The event was concluded by a presentation from Vladimir Abramytchev – Team lead in the European External Action Services – who focused on explaining how online retailers should be preparing for the upcoming EU changes. Among the key steps mentioned were:

• Adjustment of marketing strategy;
• Identification and appliance of VAT at the appropriate rates by online eCommerce websites;
• Appliance of the new VAT reporting procedures to file Mini One Stop Shop (MOSS) returns on a quarterly basis; 
• Review contracts with sellers and buyers transparently explaining the taxes collection procedures; 
• Registration for the Import One Stop Shop (IOSS) to manage cross-border taxes.

In conclusion, considering the upcoming EU eCommerce changes and the growing importance of electronic trade, an informed and timely preparation by all eCommerce stakeholders (i.e. parcel delivery operators, customs and tax authorities, online marketplaces and sellers) is extremely important. The possible delay may cause serious complications in cross-border trade such as delays, loss of revenues and fines. 

Further information. This event was organised as a part of eCommerce networking events. Subscribe to the EU4Digital Newsletter to always be informed.