The European Parliament has made some progress in its proposal to simplify VAT rules for ecommerce imports. It desires to remove the edge of 150 euros for import duties. Negotiations are still ongoing, but it surely has now been decided that the proposed changes will come into effect by March 2028.
The indisputable fact that the European Commission desired to impose import duties on goods as much as 150 euros, was already known. In May last 12 months, a proposal was first published. Since then, the technique of getting it adopted by the European Council has began.
Exemption on orders below 150 euros
When importing a product from outside the European Union, through a purchase order from an American or Chinese online seller, for instance, you’re required to pay import duties. Nevertheless, currently orders as much as 150 euros are exempted from this obligation.
In practice, many sellers on AliExpress and Temu, reap the benefits of this. With their low product prices, they don’t have to pay import duties. Because of this, their tons of of 1000’s of packages are clogging the air freight market.
Under-valuation
Based on a study by the European Parliamentary Research Service, the present threshold gives traders an incentive to under-value their goods. They’re falsely valuing their goods below the edge, resulting in lower VAT charges and evading customs duties.
Removing the edge will even reduce administrative burdens for businesses
Removing the edge of 150 euros would mean that every one imported goods might want to undergo the IOSS (import one-stop shop) of the EU. This can result in lower compliance costs. Moreover, it reduces an administrative burden for businesses inside the EU. This can make it easier for online stores within the EU to sell imported goods into the EU.
Negotiations are ongoing within the European Council. The European Parliament has already voted in favor. The changes should come into effect by 1 March 2028.
