VAT on distance sales from outside the EU
VAT exemption no longer applies to online orders of up to 22 euros from outside the EU
From July 1, 2021, onward, all online sales made by sellers from outside the EEC now fall under the Value Added Tax, regardless of how much the orders cost, or of when it was placed. VAT exemption for order up to 22 euros is now over.
Some stores charge VAT directly to customers when orders are placed. In other cases, the customer will be contacted by distributors to provide details so that the order can be cleared through customs as well as be charged the expected possible task and import duties, if the purchase exceeds 150 euros.
The new rules are set out in Council Directive (EU) 2017/2455, dated December 5, 2017, and Council Directive (EU) 2019/1995, dated November 21, 2019.
Brussels justifies these rules with the efforts to 'ensure more equitable conditions for competition (…), simplifying online cross-border commerce and increasing transparency for EU buyers where prices and consumer choices are concerned'.
The EU system related to this tax 'was last updated in 1993 and has not kept up with the growth of cross-border electronic commerce'.
Conversely, this is a way for Brussels to face up to certain 'unscrupulous salespeople based outside the EU who will mislabel their shipments – of smartphones, for instance – to benefit from this exemption'.
For more information on the customs clearance process and applicable customs rights, visit the CTT customs website.