Booming E-commerce: a Brief Overview on EU and International Regulations

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Internationalisation Importexport International marketing Digital Export

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Because of the recent outbreak of the Covid-19 pandemic, with the consequent closure of many distribution channels, e-commerce sales have grown considerably involving many European sectors of excellence. In fact, e-commerce has been an important tool for companies who wants to sell their products both on national and international territories.
E-commerce therefore represents an increasingly strategic tool for Italian and International companies: this is the reason why it is important to pay attention to some fiscal and customs issues and to related complexity in terms of accessibility, monitoring the development of the relevant EU and International regulations.

REGULATORY FRAMEWORK AND GENERAL ASPECTS

The European Union has established various regulations on e-commerce, ranging from broad to specific regulations. The main European regulations to take into consideration when talking about e-commerce are:

  • European Directive on electronic commerce 2000/21, dealing with all information of a general nature that must be provided to the consumer such as: identification data of the supplier, essential characteristics of the goods / service, prices, payment and delivery methods, methods of execution of the contract;
  • European directive 2011/83, which reinforces the information requirements of electronic commerce;
  • European Directive Omnibus 2019/2161, which amends a series of European consumer protection regulations, such as Council Directive 93/13 EEC (unfair terms) and Directives 98/6 EC (information on prices), 2005 / 29 / EC (unfair commercial practices) and 2011/83 / EU (consumer rights).

Being aware of the main regulations at European level, let us now consider the main general aspects and obligations to open an e-commerce channel:

  • VAT number or numerical fiscal code of the company which started its activities
  • Commercial registration in the Business Register
  • Inclusion in VIES archive
  • Bank current account

Anyone wishing to carry out an e-commerce activity must make certain mandatory information easily accessible and always updated, both to consumer and to the competent authorities, such as:

  • Company name
  • Domicile or registered office
  • Direct contact, including e-mail address
  • Company's register number
  • Company's VAT number or other identification number
  • A clear indication of prices and tariffs
  • Indications relating to consumer protection: the most important rights are the right to privacy (of the data and sensitive information of the user who browses / buys on the e-commerce site) and the right of withdrawal (a practice that allows the consumer to return the purchased products)

CUSTOMS AND FISCAL ASPECTS

THRESHOLD

Another key aspect to be taken into account when starting an e-commerce activity is the presence of a European threshold per year of 100,000 EUR per Member State: in the event that the total amount of e-commerce sales exceeds the limit of 100,000 EUR in a Memeber State, the company must open a VAT position in that Member State (with direct identification or through a tax representative) and, through that position, must charge the local VAT on its sales.

On the other hand, if the amount of the sales is lower than the established annual limit, the assignor is required to apply Italian VAT, unless a specific option for the application of the destination country's VAT is available.

EXCISE DUTY

It is important to take into account excise duties, specific taxes on the consumption of certain products, for trade in products at the European level. Excise goods are subject to this tax at the time of manufacture, which affect consumer products listed as:

  • Energy products
  • Alcohol and alcoholic beverages
  • Manufactured tobaccos
  • Electrical energy