For a business to successfully export goods to the European Union, it is imperative to adhere to the freshly implemented customs protocols. This involves complying with the UK export declarations and fulfilling the import requisites upon entry into Europe.
Since the 1st of January 2021, parcels destined for European Union (EU) countries from the UK are subject to customs and duty fees. This means that shipments traveling between EU countries, the UK mainland, and Northern Ireland must undergo customs clearance and necessitate the inclusion of a commercial invoice and other essential export documentation. Additionally, it is imperative to obtain an EORI number (Economic Operator Registration and Identification Number), a unique identifier that tracks and records customs information within the EU. For further guidance on import regulations and tax details in European markets, you can also refer to the EU Trade page as a valuable resource.
Customs Duty on Imported Goods After Brexit
Apart from Value Added Tax (VAT), there is often an additional Customs Duty applicable to imported goods. Unlike VAT, the rate of Duty is variable and contingent on the type of goods being imported and their country of origin. These varying rates of duty are associated with specific commodity codes, which can be located on GOV.UK.
Import Duties and Taxes After Brexit
Import duties and taxes are applicable when shipping goods to and from Europe following Brexit, particularly for goods surpassing the £135 value threshold. The specific tariff applied varies depending on the type of goods being imported, regardless of whether they were originally purchased online or acquired abroad and are now being sent back to the destination country. These duties and taxes are integral to the customs clearance process when exporting goods in the post-Brexit environment.
New EU VAT Rules
If you are shipping goods to customers located in the European Union (EU), it’s important to be aware of significant changes to the EU’s Value Added Tax (VAT) rules that came into effect in 2021. These changes primarily target imports in the B2C (business-to-consumer) e-commerce sector, impacting both businesses and online shoppers. However, they may also have implications for B2B imports.
The impact of the new EU VAT reform on your business hinges on several factors, including the value of the goods you sell, whether your customers are businesses or consumers, and whether you use online marketplaces.
Here’s a brief overview of the changes:
- Goods Valued up to €22: Goods with a value of up to €22 will no longer be exempt from VAT and will now require formal customs clearance. This should be taken into consideration when pricing your products.
- Goods Valued up to €150: If you are selling directly to EU consumers, you have two options for handling VAT:
- Bill your account – the freight forwarder declares VAT at the point of import and charges your business.
- Charge consumers VAT at the point of sale and declare it to the EU, for example, via the IOSS (Import One-Stop Shop) platform.
- Goods Valued Above €150: The EU VAT reform primarily affects goods valued up to €150 that are sold to consumers. For goods sold to businesses and goods valued above this threshold, you can continue to charge, declare, and pay EU VAT as you do today.