What are the New Rules for Taxing the Importation of Goods from Third Countries?

Under the new changes, any import of goods from a non-EU country is to be declared and taxed, regardless of its value. The import one-stop shop (IOSS) system is being introduced to facilitate the procedure for customs clearance of goods

From July 1, 2021, new rules on the taxation of importations from third countries shall apply within the European Union. This requires e-commerce admirers to pay more attention to the seller (the trader from whom they order) if they want to receive the goods without additional effort.

Otherwise, there is a risk that the consumer will be surprised by the need to pay additional fees and fill in a customs declaration in order to clear the goods from customs.

The conditions until and after July 1, 2021

Until July 1, 2021, importation of goods from non-EU countries, the value of which is below the threshold of EUR 22 (for Bulgaria the threshold is equated to BGN 30), were not subject to taxation and did not require customs declaration. For the importation of goods over EUR 22, a declaration had to be filled in and a tax had to be charged.

From July 1, 2021, all importations of goods from non-EU countries are subject to taxation and customs declaration. This means that regardless of the value of the goods, the purchase will be declared and tax will be due on it.

The above sounds quite aggravating, and also creates a prerequisite for the formation of huge queues in front of customs institutions. To avoid this discomfort, an import one-stop shop (IOSS) system has been introduced, which makes it possible for the end user to purchase and receive a consignment with an own value of up to EUR 150 from a third country without additional complication.

What is the import one-stop shop (IOSS) system and how do we buy from a registered trader?

IOSS is a system in which a trader selling goods in the EU can register. When purchasing from an IOSS-registered trader, the consumer pays the value of the goods and the tax upon finalization of the order, and the necessary information for customs control is filled in the system and an IOSS consignment number is generated.

When the consignment arrives in the country of destination, the customs control is carried out on the basis of the IOSS number indicated in the consignment and the consumer receives the goods without any additional action.

The IOSS system also facilitates business, as it allows the trader registered there to pay the tax due on all deliveries for the month made within all Member States on the basis of a single declaration. After submitting the declaration and paying the tax on it, the system allocates the amounts to the budget of each Member State in which the trader has made an import.

When cannot the lenient procedure be used?

The above procedure cannot be used if any of the following conditions are true:

  • the goods have a cost of more than EUR 150;
  • there are restrictions for the goods according to their nature (excise goods, etc.);
  • the trader is not registered in IOSS.

How do we buy when the lenient procedure is not applicable?

On the occasion that for any of the above reasons the simplified order for delivery is not applicable, it will be necessary to submit a declaration under the general procedure (for goods up to EUR 150 a simplified form of the declaration is provided) and to pay VAT.

The end user can personally fill in the declaration and pay the tax or use the additional service provided by postal operators and courier services. In the latter case, the consumer receives the goods after completing all formalities from the postal operator/courier against payment of the relevant fee for this additional service.

In all cases where the lenient procedure is not applicable and the services of the postal operator/courier are not used, the end user will have to fill in a customs declaration and pay VAT to receive the goods.

To facilitate the purchase of goods from third countries, we recommend that consumers seek information from the trader from whom they shop, and for traders – to get acquainted in detail with the requirements for their activity and the restrictions that they should be taking into account.

This material is for information on the new rules on the taxation of importation from third countries and does not include all the restrictions provided by law.