EU customs regulations: 22-euro exemption threshold scrapped from the beginning of July

Customs and postal services are ready for this change. Doubling of the volume of packages sent shows why action is required: fiscal fairness should also apply in the digital sphere

The corona pandemic has accelerated the already dynamic increase in online shopping further still. The number of packages cleared by the Austrian customs service doubled in the period from 2019 to 2021. Up until now no import turnover tax has been levied on packages with a value of under 22 euros - but this has resulted in evasion attempts on an unprecedented scale: senders deliberately state the value of the goods is lower than it actually is, so as to avoid having to pay import turnover tax. In three-quarters of all cases in the past where the goods value of a package was given as under 22 euros, the value stated was too low, in an attempt to avoid paying import turnover tax. This practice was routinely adopted in particular for packages sent from third countries such as China.  From 1 July 2021 the implementation of new EU customs regulations will lead to the tax now being levied on goods with a value of 1 cent and upwards. The move will help fight fraud and promote fiscal fairness.

“The dynamic increase in online trading has shown us that there are unfortunately too many tax loopholes in this area. The principle of fairness dictates that we must close them up. For this reason we are scrapping the tax exemption threshold on imports stemming from online trading, thereby putting a stop to this kind of tax evasion. Over and above this, I am also pushing on the international stage for global digital taxation so that fiscal fairness will apply, whether a business model is digital or analogue. It is the international digital corporations in particular who have been the winners in the Covid crisis; and the pandemic has underlined the necessity for a fair set of rules,” commented the Minister of Finance, Gernot Blümel.

Powerful cooperation

The customs service has been working closely with the postal service on a joint project entitled “fit4commerce” since autumn 2019, in preparation for the increase in online trading. By modifying internal processes, with accompanying modernisation in the area of IT, it will be possible to process more shipments in future and levy import turnover tax accordingly. According to current estimates, a volume of some 6 million shipments per year is expected.

“As part of this successful collaboration, the Austrian Post has made wide-ranging and detailed preparations to ensure receiving and processing import shipments will function seamlessly after 1 July 2021 as well,” said Chief Executive Officer of the Austrian Post, Georg Pölzl. “It is important to us that consumers continue to have the freedom to choose where they make their purchases.”

As low-value shipments will also be subject to import turnover tax in future, if shipment documents fail to disclose values, the recipients will be required to provide documents. Details can be found on the Austrian Post website.

In order to respond to further enquiries relating to shipments from non-EU countries, the Austrian customs service has been running an information campaign and has now also set up an e-commerce hotline. The hotline has been in operation since 1 June 2021.