Cullen International’s new report explains how EU VAT and customs rules apply to imported e-commerce goods, as well as describing the customs reform package, proposed by the European Commission in 2023.

Value-added tax (VAT) generally applies to all goods and services sold for use or consumption within the EU, although certain exemptions may apply depending on the nature of the activity.

The EU's VAT rules for the online sales of goods and services (applicable as of 1 July 2021) aim to facilitate cross-border trade, combat VAT fraud, reduce administrative and compliance costs, and ensure fair competition for EU businesses.

Customs rules are regulated by the Union Customs Code (UCC). When a package containing goods is shipped outside or into the EU, the relevant postal operator or courier (“operator”) needs to handle customs clearance. The operator normally completes and presents the customs documentation, ensures clearance, and passes on relevant duties and VAT payments to the customs authorities.

Our new report also explains the customs reform package, proposed by the European Commission. Under the reform, all imported goods, regardless of their value, will be subject to VAT on import (with the possibility to register with Import-One-Stop-Shop or IOSS) and import duties.

The report provides an overview of how those rules apply for postal operators and a worked example demonstrating the practical application of the rules.

For more information and access to the full report, please click on “Access the full content” - or on “Request Access”, in case you are not subscribed to our European Postal service.