Exemption on import duties to end in 2028
The European Parliament has made some progress in its proposal to simplify VAT rules for ecommerce imports. It wants to remove the threshold of 150 euros for import duties. Negotiations are still ongoing, but it has now been decided that the proposed changes will come into effect by March 2028.
The fact that the European Commission wanted to impose import duties on goods up to 150 euros, was already known. In May last year, a proposal was first published. Since then, the process of getting it adopted by the European Council has started.
Exemption on orders below 150 euros
When importing a product from outside the European Union, through a purchase from an American or Chinese online seller, for example, you are required to pay import duties. However, currently orders up to 150 euros are exempted from this obligation.
In practice, many sellers on AliExpress and Temu, take advantage of this. With their low product prices, they do not need to pay import duties. As a result, their hundreds of thousands of packages are clogging the air freight market.
Under-valuation
According to a study by the European Parliamentary Research Service, the current threshold gives traders an incentive to under-value their goods. They are falsely valuing their goods below the threshold, leading to lower VAT charges and evading customs duties.
Removing the threshold will also reduce administrative burdens for businesses
Removing the threshold of 150 euros would mean that all imported goods will need to go through the IOSS (import one-stop shop) of the EU. This will lead to lower compliance costs. Additionally, it reduces an administrative burden for businesses within the EU. This will make it easier for online stores in the EU to sell imported goods into the EU.
Negotiations are ongoing in the European Council. The European Parliament has already voted in favor. The changes should come into effect by 1 March 2028.
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