Over the past several years, online shopping from abroad has continued to grow in popularity in Finland, particularly so during the coronavirus crisis.
A large proportion of the parcels that arrive were ordered and shipped from China, the United States or elsewhere outside the EU. The majority of those packages have arrived at their destinations free of tax and extra paperwork.
But that largely carefree situation is set to change on 1 July, according to Jarkko Saksa, the Director General of Finnish Customs.
After that point in time, all packages arriving to Finland from outside the bloc will be subject to VAT and the filing of customs declarations, regardless of the value of their contents.
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"Presently, packages with a value of up to 22 euros are delivered directly to people's mailboxes. There [has been] no need to declare or pay VAT for them," he explained.
"As the threshold for collecting VAT has been 22 euros, in practice there have been only 100,000 packages per year [from outside the EU] that needed customs declarations and were subject to VAT. In the future, we estimate that there will be 10-15 million taxable packages per year, which means the growth will be very significant," he said.
The anticipated growth will be so large that the customs agency has already begun warning residents of potential delivery delays that could last weeks as the new policy is implemented in less than two weeks.
"Certainly, at least in the initial stage, there will be a rigidity and a challenge in how quickly packages can be delivered. Before a package can be sent onward, a customs declaration will need to be issued and processed and VAT will need to be paid. It certain will take some time. One can talk about weeks, or even months," Saksa said.
Police: Delays will increase scams
According to police chief superintendent Tuomas Pöyhönen from the National Police Board, the increased delivery delays will likely create bigger windows of opportunity to scam online shoppers.
One of the tools that could be used by tricksters trying to shed people of their cash is a relatively new piece of malware dubbed FluBot, which Finnish police issued a warning about last week.
According to a blog post by data security firm F-Secure, the Android-based malicious software is proliferating on smartphones across Europe.
In short, the malware — spread by SMS text message — steals a person's personal information in order to then rob them of their money, take over their accounts or even steal their identity.
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As an example of how the scam works, chief superintendent Pöyhönen said that one of these text messages trick people into inadvertently downloading the malware with a message like: "Are you waiting for a package? Track your delivery to see where it is," with a website link.
If that link is followed, users will end up at a bogus website which will automatically install malware on Android phones. Then, the software begins seeking out personal information like banking details.
"After that, it's open, which means that scammers can empty people's accounts and make payments," Pöyhönen explained, saying that the software can even help scammers apply for payday loans in a victim's name.
How to protect yourself
However, there are ways for people to protect themselves against the malware. They include: not opening links in SMS messages, not installing unofficial apps on phones and to use legitimate delivery firm apps to keep a eye on deliveries.
It is also a good idea to tell friends and family about the potential dangers of such scams.
Pöyhönen said that many residents in Finland have lost money in scams like this, with some being bilked out of well over one hundred thousand euros.
More than 20,000 criminal complaints about online scams were filed last year with authorities and even more are expected this year.
Pöyhönen said the number of complaints rose by 20 percent, year-on-year and that this year is on track to see an increase of a similar amount.
According to Saksa from Customs, the process of ordering from abroad will eventually become more streamlined, as there is a system for non-EU online merchants to charge the required VAT as items are ordered.
The system, called Import One-Stop Shop (IOSS), is organised by the EU and aims to ease the process of ordering from abroad amid the new regulations and requirements. VAT payment information is then forwarded to the destination country and will reduce the time ordered packages wait for processing.
However, items arriving from outside the bloc will still need customs clearances. Delivery firms have set up services to handle that process on the behalf of the customer, usually for an extra fee.
It is expected that it will take some time before the new process will work smoothly, however.