On July 1st, 2022, the VAT e-commerce package entered into force. Its scope covers the distance sales of goods carried out by businesses to private persons/consumers (B2C transactions) in shipments/parcels with a value up to 150 Euros, (excluding several categories of products, such as products subject to excise duty).

In brief, the main changes in the  distance sales of goods imported from third countries or third territories (e-commerce) are the following: 

  • Abolition of the VAT exemption for the import of goods with a value  not exceeding 22 euros, so that all imports of goods are subject to VAT, regardless of their value. 
  • Establishment of two new, optional schemes for the collection of VAT relating to the import of goods with a value not exceeding 150 euros. 

-    IOSS (Import One-Stop Shop) import scheme, where the seller of the goods is liable for tax and the tax is attributed to the One-Stop-Shop. 

-    Special arrangements for the declaration and payment of VAT , where the recipient of the parcel is liable for the tax and the tax is paid on his behalf to the Customs Authorities by the person who presents the goods to the customs office (usually express carriers and the postal service provider ELTA SA). 

Regardless of the special scheme for VAT collection that may be chosen, import customs formalities should be applied.

  • Establishment of the obligation to lodge a customs declaration for free circulation for each shipment (parcel),
  • Establishment of a new super-reduced customs declaration (H7) with the possibility of lodging it before the arrival of goods to speed up the customs clearance process, 
  • implementation of common rules and procedures for express carriers and the postal service provider (ELTA SA), 
  • abolition of sorting of postal items in the presence of a customs officer.

In addition to the aforementioned, it is stressed that the above changes do not affect the VAT exemption provided with the application of customs formalities for non-commercial shipments of goods with a value not exceeding 45 euros sent from a private person to another private person.

In particular, since the introduction of the two new optional schemes  for the collection of VAT, the following apply:

a. IOSS (Import One-Stop Shop)
In order to use the special import scheme, the seller is registered to IOSS in a Member-State and obtains a unique IOSS VAT number which is valid throughout the EU. If the seller is established outside the EU, he/she is required to appoint an intermediary. The intermediary must be registered to IOSS and obtain an IOSS VAT number prefixed with IN. Then, the intermediary shall obtain, for every person he/she represents, an IOSS VAT number with the prefix IM which shall be valid throughout the EU.

Based on the special IOSS scheme, the seller of goods or online platform (deemed supplier) shall charge, at the time of sale, the buyer/recipient of the parcel, with the value of the product plus VAT at the rate applicable in the Member-State of arrival of the parcel (Member-State of consumption). The VAT collected shall be remitted by the seller to the IOSS one-stop shop. In this way, the tax liability of the recipient of the parcel shall be fulfilled and the customs authorities shall grant VAT exemption upon import of the goods, provided that the seller's  IOSS VAT number is indicated in the import declaration and its validity is confirmed by the Customs Authority. In the event that, for any reason, the seller's IOSS VAT number is not indicated in the import declaration, the recipient of the parcel shall be charged with VAT which is paid to the customs office of import. The buyer who paid the VAT twice may request a refund of this amount from the seller or the online platform.

b. Special Arrangements 

Based on this scheme, the recipient of the parcel is liable for VAT payment. However, the tax shall be paid on behalf of the consignee by the person presenting the goods to the Customs Office (usually express carriers and postal service providers). The tax payment is carried out using deferred payment, on the 16th day of the following month from the entry in the accounts of the tax debt, without requiring the granting of a relevant authorisation and the provision of a guarantee. The application of the specific scheme does not substantially differ from the existing procedures for the collection of VAT by the customs authorities upon import of goods. 

Use of super-reduced declaration H7 
The super-reduced declaration H7 is used for the shipment of goods with an intrinsic value not exceeding 150 Euros.
The following are excluded from the scope of H7: 

• goods subject to excise duty or national consumption tax

• New means of transport 

• Goods subject to prohibitions and restrictions 

• Goods released for free circulation under customs procedures 42 and 63 (import and re-import of goods with VAT exemption and dispatch to another EU Member State) 

• Goods subject to anti-dumping duties and countervailing duties 

• Goods initially placed under customs warehousing procedure or in a free zone (the exemption does not apply for goods in temporary storage or transit). 

Its scope also includes shipments sent from a private person to another private person with an intrinsic value not exceeding 150 euros, amongst which those benefiting from a customs duty exemption, in accordance with Article 25 of Regulation 1186/2009 concerning non-commercial imports.

Relevant Directives