New EU Customs Regulation Ends VAT Exemption for under €22 Parcels
March 19, 2020
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Following an amendment to Regulation (EU) 2015/2446 on EU customs rules, from 1 January 2021 it will be possible to declare goods up to €150 with a simplified customs declaration. The existing VAT exemption for goods up to 22 € will thus be abolished - the popular shipments from China with the label "Gift, 10$" will then be a thing of the past.
Although all imports into the EU will then have to be declared with an electronic customs declaration in order for VAT to be charged, this is considerably simplified for low-value goods. Due to the enormous volume of low-value shipments imported into the EU, neither the declarants nor the customs authorities' IT systems can cope with the creation and processing of a "normal" standard customs declaration per shipment. From next year, goods with a value of less than €150 (including postage) will not require a standard customs declaration, as no customs duty will be payable.
Therefore, the EU Commission has amended the delegated UCC Regulation to provide for an appropriately lower and therefore more manageable level of data (a "greatly reduced set of data") in the customs declarations for the import of low value consignments (below the customs threshold of €150). This provision will alleviate the administrative burden resulting from the sharp increase in imports of low value goods for both customs and traders. The amended regulation can be found here.
The new customs rules are particularly relevant for the many shipments of cheap products from China, which are offered via eBay, Amazon and companies such as Alibaba or Bangood etc. The Chinese traders (and their customers) will be more annoyed than pleased, as all goods will then be subject to VAT. Even if the procedure for goods valued under €150 is easier, it will be more complicated and expensive for the many cheap products priced at or under €22.
Although all imports into the EU will then have to be declared with an electronic customs declaration in order for VAT to be charged, this is considerably simplified for low-value goods. Due to the enormous volume of low-value shipments imported into the EU, neither the declarants nor the customs authorities' IT systems can cope with the creation and processing of a "normal" standard customs declaration per shipment. From next year, goods with a value of less than €150 (including postage) will not require a standard customs declaration, as no customs duty will be payable.
Therefore, the EU Commission has amended the delegated UCC Regulation to provide for an appropriately lower and therefore more manageable level of data (a "greatly reduced set of data") in the customs declarations for the import of low value consignments (below the customs threshold of €150). This provision will alleviate the administrative burden resulting from the sharp increase in imports of low value goods for both customs and traders. The amended regulation can be found here.
The new customs rules are particularly relevant for the many shipments of cheap products from China, which are offered via eBay, Amazon and companies such as Alibaba or Bangood etc. The Chinese traders (and their customers) will be more annoyed than pleased, as all goods will then be subject to VAT. Even if the procedure for goods valued under €150 is easier, it will be more complicated and expensive for the many cheap products priced at or under €22.
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