Online bargains may become fewer and less attractive, thanks to proposed regulations that could eliminate a popular tax exemption.
It may be the end of an era for compulsive buyers or those who hunt for very low-cost products on the Internet. For several years, European consumers have massively adopted new online shopping habits, with the emergence of large, well-known e-commerce platforms such as Shein, Temu, Wish, GeekBuying and AliExpress.
These online retail giants have conquered the Old Continent by flooding it with very cheap products, thanks to a mixture of aggressive commercial practices, sometimes bordering on legality, but also to a perfectly legal provision on imports of products within the European Union (EU).
Indeed, online purchases of products shipped from countries outside the EU are currently exempt from customs duties for orders under 150 euros. This exemption allows e-commerce giants, particularly Asian but not only, Amazon also taking advantage of it, to practice extremely aggressive and advantageous prices for European consumers.
However, this exemption from customs duties is in the sights of the European Commission for two reasons: it distorts the conditions of competition with traders who ship their goods from the territory of the European Union and, above all, it is abused by many sellers, who fraudulently declare lower prices when shipping in order to avoid taxation.
Thus, according to information from the Financial Timesthe European Commission is considering ending the exemption from customs duties for orders worth less than 150 euros, and subjecting all goods from countries outside the European Union to this tax. And this additional cost, which would be paid by the seller upon shipment, would obviously be passed on by the trader in the sale price, and therefore to the consumer.
Last year, two billion small orders of less than 150 euros entered the European territory without generating customs duties. This shows the extent of the loss of revenue for the EU and the extent of unfair competition for European companies. Because the goods concerned are often poor quality imitations, or even counterfeits or dangerous products that do not comply with European safety standards.
This new regulation is not expected to come into force tomorrow, however. At this stage, it is only a project mentioned by the European Commission, which has not yet been the subject of a draft law. But the axe could fall sooner than expected: the Commission having already mentioned the idea last year, and its recent announcement of a heavy tax on Battery Electric Vehicles from China shows that it is paying particular attention to international trade issues at the moment.