Sweden to return 400.000 packages to China

The Swedish postal service, Postnord, is forced to return 400.000 letters and parcels to non-EU countries after a loophole in the VAT-charge has been closed, according to the Swedish news site The Local.

An additional 200.000 items are still awaiting collection and will have to be shipped back, according to a representative for Postnord

Formerly Swedes could avoid paying the VAT (75 kronor) if the value of the imported goods from a non-EU country were less than 22 euro. Naturally this meant that several goods such as electronics were much cheaper if bought from Chinese e-commerce sites such as Alibaba or Wish.

An estimation by the Swedish government calculated the financial loss of the loophole to be at least half a billion Swedish kronor a year, which led to Financial Minister Magdalene Andersson to seek a solution.

Read also: PostNord Denmark enters new Alibaba collaboration.

Postnord suggested charging VAT “from the first krona of the value of all goods” and also charging a 60 kronor administration fee for all goods from outside the EU. This was implemented in March and although Postnord announced the change in January, the consequence doesn’t differ: About 400.000 packages, maybe more, that likely wont be collected and will have to be returned to China as per trade agreements.

The packages and letters likely arrived by plane, but will be shipped back by boat.

“We’re happy about that, because it at least reduces the environmental impact of sending back all the goods. Obviously the ideal is that people don’t order things they’re not going to collect,” Postnord’s communications director Thomas Backteman told SVT.

Backteman also said that an extended time period to introduce the new rules would have allowed both the postal service and consumers to better prepare, and that the company was still working on a solution to the problem, according to The Local.

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