A number of amendments to EU Directive 2006/112/EC will come into force on 1 July 2021 and shall affect the Customs and VAT rules applicable to cross-border business-to-consumer (B2C) e-commerce activities.
As a consequence of these changes, the €22 (twenty-two) VAT exemption threshold on small parcels imported into the EU for delivery to consumers will be removed. Malta Government Customs controls and VAT charges will now apply for all parcels purchased from non-EU countries, including those under €22 in value and which are presently exempted from VAT. Therefore, as from 1 July 2021, VAT shall be charged and paid at the point-of-sale for parcels not exceeding €150 (i.e., those parcels that fall below the threshold for application of customs duties of €150) provided the seller is registered to use the ‘Import One Stop Shop’ (IOSS). To facilitate this arrangement, the European Commission shall be introducing a reduced and more manageable Customs data set requirement. Once the Customs and VAT declarations submitted are correct and VAT has been duly paid at the point of purchase and provided there are no objections by Malta Government Customs, the parcel will be duly delivered to the client’s address without additional charges.
The above changes shall result in a sharp increase in the number of Customs and VAT declarations that need to be submitted. MaltaPost plc has prepared for this change by investing in new IT software to handle this increase. The most convenient option for the local consumers is to choose non-EU sellers that charge and collect VAT at the point-of-sale. Customers may find such information on whether VAT is charged this way on the seller’s website.
If the online seller does not collect VAT at the point of sale and the parcel is not cleared for Customs and VAT purposes in a transit country in the EU, the same parcel will have to be processed through the Malta Government Customs import system upon arrival in Malta. In such cases, the parcel will be inspected by Malta Government Customs officials. If the parcel is cleared by Malta Government Customs, the customer will receive a communication from MaltaPost plc to pay the VAT, Customs Duties and processing fees online. Following payment, the item will be delivered to the recipient.
For more information about these new VAT and Customs Regulations, please visit www.maltapost.com/customs or https://customs.gov.mt/other-pages/noticeboard/2021/03/25/the-vat-e-commerce-package-and-the-changes-taking-place-as-from1st-july-2021