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PostNord to levy new fee on mail items from countries outside EU Customs Union

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Relating to last week article on “Government wanting a piece of the eCommerce pie”. This week we can see it in action with PostNord. Swedish Customs now require VAT collection on items that come from outside the EU Customs Union from the first Swedish Krona (SEK). PostNord have revised its admin fee to accommodate the changes. The collection of VAT on imported items comes into effect on 1st March.

In addition to VAT collection, Post Nord will also charge an admin fee to collect the VAT from the customer on the door step. Before these changes, VAT was only charged on goods over the equivalent to 22 euro (220.28 SEK or $27.09 USD). Post Nord also made a 125 SEK ($15 USD) charge to collect any relevant duties and taxes. With the new regulation, consumers will have to pay 25% VAT (similar to GST) on the cost of the declared value of all the items.

However, PostNord has lessen the VAT impact by revising its admin fee from 125 SEK to 75 SEK ($9.30USD) for items value below 1,500 SEK ($185USD) items with a value equal to or above the value of 1,500 SEK will still be charged at 125 SEK.

PostNordAnalysis

Based on my analysis, the greatest effect will be on low value consignments under the new levy. The total consumer cost increased by 100 Krona ($12.30 USD) or 100% for a 100 Krona item value. The effect is lesser as the item value increases. For example, 200 Krona ($36.9 USD) item value, the consumer cost increase at 63%. Between 22 euro (220.28 SEK or $27.09 USD) and 1500 SEK ($185 USD), VAT effect is indifferent on “Before” and “After” as it applies to both scenarios. However, due to PostNord reduction in admin fee we can see positive effect of a 10% decrease in consumer cost.

The impact on our own exports to Sweden will be significant with the average cost of Ecommerce items from our region being between $10 - $20 USD (81.36 – 162.73 SEK) the cost for Swedish consumers will increase significantly making importing our products less attractive.

Commentary by Maverick Chung

Source:

Sweden Customs, http://www.tullverket.se/en/private/receivingorsendingagift/orderinggoodsonline.4.792224361590183a4d34492.html
PostNord Before revision pricing, https://www.postnord.se/en/receiving/collecting-mail/from-another-country
PostNord After revision pricing, https://www.postnord.com/en/media/press-releases/postnord/2018/new-fee-to-be-levied-on-consignments-from-third-countries-from-march-1/

Maldives Post launches PikPost Service

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Celebrating the World Post Day on 9th October, Maldives Post launched a new service called PikPost, allowing customers to collect their package 24hrs, 7 days a week, through self-serving stations. PikPost is an ingenious delivery service introduced by Maldives Post to provide postal customers a quick, secure and a reliable way of delivering packages.

Korea Post’s new letter service in pilot stage

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Korea Post introduced a new supplementary letter service, named Tracked Ordinary Letter, positioned between ordinary letter and registered letter in terms of feature and price to expand customer choice.

When you send an ordinary letter, you may be worried about that your letter has been safely delivered to the addressee. You could choose the registered mail service for important documents. But for other documents and letters with lesser priority like wedding invitation or personal letter, registered mail of higher price is not an easy option. To help these customers and give them a wider choice, Korea Post introduced a new service with tracking and delivery notification features at a reasonable price, positioned between ordinary letter and registered letter.

Source: Korea Post, provided by Michelle.

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