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e-Commerce in European Union

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The European Parliament and the Council adopted June 8, 2000 a European Directive of the European Parliament and of the Council on certain legal aspects of the information society, especially electronic commerce (Directive 2000/31 /, including the electronic commerce, in the Internal Market).

The EU directive was preceded by isolated policies of member states of the union.

In globalization, the Internet has become a significant driver of e-commerce. However, issues relating to the purchase of goods abroad reveal difficulties, especially in case of dispute.

European countries need to transcribe them into their national legislation directives for this area, which will make the rules uniform between each country of the European Union.

As part of B2C and when a purchase takes place outside of the European Union, you must be careful to know who you’re doing business, and to know the conditions of the sale. In case of serious dispute, the only recourse may be filing a complaint and in the country of the buyer, and the seller’s country. Most countries law protects consumers by indicating that a buyer can not be deprived of his right to file a complaint in his home country.

It seems it is better to also have some knowledge of the law of the country where the seller is located.

When it comes to B2B, the consumer law rather leaves room for the international trade law.

When a product is purchased from abroad, customs duties and VAT (or equivalent) are to be paid, as if the product was purchased on national soil.

In practice:

  • for all purchases made within the European Union, there are no customs duties and VAT to be applied. So it may be worth, for a EU company, buying inside European countries where VAT is lower (for example, when that of Germany was 15%). Warning for France, departments and overseas territories are considered as export territories compared to metropolitan France.
  • for all purchases made outside the EU, customs duties and VAT are payable at the entrance to the area. Since the buyer is usually not present when control passes the border (most often it is an airport), postal services are sworn to collect these taxes. Usually these taxes are applied in the form of a fee or globally (product cost + shipping, for example) which can increase much the final cost of the purchase. Private companies are better organized for this work than traditional postal services.

Electronic products are often stopped and taxed at the border. Only books that have a very small VAT and customs duties, are never blocked by the postal service because the cost of recovery would be higher than the taxes themselves.

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