COMPANIES & STRATEGIES - SERVICES & ADVISORY

E-commerce

Custom fees payment inconvenient for credit card users



Customers who do not have Payconiq will have to pay the added VAT invoice in cash.  Photo: Shutterstock

Customers who do not have Payconiq will have to pay the added VAT invoice in cash.  Photo: Shutterstock

Customers purchasing items under €22 from outside the European Union have to pay taxes. These are only payable by cash or Payconiq, a choice that doesn’t depend on the government, says finance minister Pierre Gramegna (DP).

Since 1 July 2021 deliveries of products of less than €22 in value from non-EU countries are accompanied by an additional invoice from Luxembourg’s customs office. Deputy Marc Goergen (Pirate Party), in a parliamentary question submitted last November, noted that it wasn’t possible to pay by credit card. He also asked why Payconiq, formerly Digicash, is the only option aside from cash.

To this, Gramegna, who is being replaced in office by Yuriko Backes (DP) on Wednesday, replied that the VAT isn’t levied by customs directly, but rather by the Post or delivery firm that delivers the package. “Mailmen are equipped with a scanner, to scan tracked mail slips or to allow clients to sign a package upon delivery,” he said. Though these can generate a QR-code allowing customers to use their mobile banking app and Payconiq, the devices are not made to scan credit cards.

The VAT exemption on purchases below €22 was abolished to reduce tax fraud, as European studies had demonstrated that sellers outside of the European Union would attach fraudulent labels to expensive shipments to avoid the process of customs and added charges.

Though customers can pay the tax either directly to the seller, or by card at the post office if they do not have Payconiq or cash, there are currently no mentions of invoices with online payment possibilities, another option offered for instance by Belgian postal services.