Consumers’ willingness to order goods from Asia may be curbed by the fact that products ordered from outside the European Union will be subject to VAT as of 1 July even if the value is under 22 euros, a representative survey commissioned by the Hungarian Post revealed.
The survey conducted in May among people aged 18-65 revealed that two-thirds of shoppers who buy goods from outside the EU are either planning to cut down on their orders or stop ordering altogether after 1 July. As a result, Hungarian and European online retailers may benefit from the change in regulations.
According to the survey, 79 percent of the group concerned have heard about the change, and 56 percent know that low-value products ordered from outside the European Union will be subject to VAT.
18 percent of respondents are also aware that customs clearance will be necessary, involving an administrative fee to be paid. A third of respondents said the VAT obligation would not affect their orders, while 17 percent claimed they might order even more from outside the EU.
However, 45 percent of respondents said they would cut down on their orders after the new regulation comes into force, and 22 percent even declared they would not order from outside the EU.
The survey revealed that a third of Hungarians have already ordered low-value products from outside the EU, and at least a quarter of them shop regularly from the Far East.
The research also showed that online shopping is more popular among men. Those who order from outside the European Union are typically 30-39 year old men from Budapest with secondary education. On average, online shoppers order more than 10 times a year from abroad, and two-thirds of their orders come from China.
The change in the European Union VAT legislation to come into force on 1 July 2021 will specifically affect these purchases, as the majority of consignments from the Far East have previously fallen into the VAT-free category of under 22 euros.
The survey also showed that 69 percent of those concerned are not aware that the full VAT exemption for products coming from outside the EU is subject to EU level legislation.