The elimination of the VAT exemption for small consignments

The importation of goods by/for the account of consumers with a value of up to EUR 22 is exempt from VAT until 1 July 2021. At present, it is easy for consumers to order goods from a third country (e.g. China). If they import these goods and the value of these goods is EUR 22 or less, no VAT is owed on the importation thereof.

At this time, the VAT exemption for small consignments is leading to unfair competition between EU and non-EU businesses. The latter group is not required to charge VAT and is therefore able to offer its products to consumers at lower rates. Also, the EU is missing out on a considerable amount of tax revenue due to this exemption. By eliminating this exemption, the EU hopes to prevent unfair competition and generate more tax revenue. 

The elimination of the exemption might lead to consumers being surprised by VAT charges upon receipt of the goods. To avoid this, with effect from 1 July 2021, businesses will be able to avail themselves of the Import One Stop Shop (I-OSS).

How the I-OSS works is explained in more detail here The introduction of the import scheme (Import One Stop Shop).

The customs legislation will not change with effect from 1 July 2021, as a result of which the importation of goods with a value of up to EUR 150 will continue to be exempt from import duties.

More information? download our whitepaper here.

For other questions, you can always contact our office at +3120 760 4500.