Home > New European regulation of VAT on imports

New European regulation
of VAT on imports

A change in value added tax (VAT) regulations comes into effect on July 1, 2021.

As of July 1, 2021 the VAT exemption for imported parcels with contents valued up to 22 euros will be lifted. 

New European import VAT regulations

  • All commercial goods imported from foreign countries to the European Union or French Overseas Departments within the European Union will be subjected to VAT regardless of their value. VAT will be applied at the rate in effect in the buyer's country of residence.
  • All commercial goods imported from foreign countries or from the European Union within the French Overseas Departments will be subjected to VAT regardless of their value. The VAT will be applied at the rate defined in the DOM of residence of the buyer.

For shipments whose value does not exceed 150 euros there will be two possibilities:

  • either the VAT will be applied at the time of the sale using the new one-stop import system (IOSS) for your shipments from individuals customers located in the French Overseas Departments as well as from any other country to Metropolitan France.
  • or the VAT will be collected directly by Chronopost at the time of delivery of the parcel by the delivery person or online (depending on the origin of the goods).

The introduction of the One-Stop-Shop for Imports (IOSS) aims to facilitate and simplify the declaration and payment of VAT for your online sales to your customers in the European Union.

For IOSS click here

Calculation of the amount of import tax from countries outside the European Union

Shipments from professionals to individuals or businesses : 

Value of goods Over 1 eur Over or equal to 151 euros Outbound to French Territories
All fees  VAT VAT + custom fees  VAT + dock dues (variable) + custom fees

 

Shipments from individuals to individuals without commercial transactions ("personal effects" shipments):

Value of goods Over 45 eur Over or equal to 151 euros Outbound to French Territories
All fees  VAT VAT + custom fees VAT + dock dues (variable) + custom fees

 

All imported goods are subjected to customs formalities and must be sent with a commercial or proforma invoice.

Everything you need to know about custom fees for importing and exporting

 

 

What changes on July 1, 2021?

Case study

An individual customer residing in the European Union purchases online from the United States a 20 euro tee-shirt (or in any other country outside the European Union or the French Overseas Departments)

Before July 1st ,2021

The value of the purchase being less than 22 euros no VAT is applied.

After July 1st, 2021

The value of the purchase being higher than 1 euro the VAT of the buyer's country of residence applies. Either the e-buyer paid the VAT at the time of the purchase to the e-merchant or at the time of the delivery of the parcel to the deliveryman or online (depending on the origin of the goods).