The EU is also set to abolish the tax exemption!

EU proposes to abolish the €150 tax-free policy

According to reports, the European Commission has announced an important decision: Chinese cross-border e-commerce platforms need to take responsibility for unsafe and dangerous products sold on their platforms. The European Commission pointed out that the increasing number of low-priced products from Chinese companies puts enormous pressure on customs authorities.

For this reason, the European Commission called for stronger customs supervision and for e-commerce platforms to provide detailed information on goods before they arrive in the EU. In addition, it called on EU lawmakers, including member states and MEPs, to remove tax exemptions for imports under €150 (about £125) and suggested that consideration be given to levying a handling fee on retailers to cover the increasing cost of oversight.

Indeed, the EU has previously been negotiating the removal of the €150 duty-free policy.In May 2023, the European Commission officially released its proposal for “EU Customs Reform: a vision for a simpler, smarter and safer customs union driven by data” in response to the operational pressures that EU Customs is currently facing, including the significant growth in trade volumes (especially in the e-commerce sector), the number of EU standards that have to be checked at the border rapidly growing, and changing geopolitical factors.

Among other things, the EU has cited plans to remove the current tax exemption for imports of goods under €150, and that such parcels entering the EU may be subject to customs duties in the future. The EU believes that up to 65% of such parcels currently entering the EU are undervalued and avoid customs duties. At the same time, the EU is proposing a new Customs and Excise Directorate General to oversee the EU Customs Data Center.

By 2024, the EU, for its part, is moving forward with plans to impose tariffs on cheap goods, as well as plans to remove tax exemptions on goods worth less than €150. According to data disclosed by the European Commission, 2.3 billion related duty-free goods entered the EU in 2023, mainly stemming from the rapid growth of Chinese e-commerce platforms. Some local retailers and industry organizations have complained that Chinese e-commerce companies are using the duty-free channel to sell cheap and substandard goods. 2024 will see an influx of about 4.6 billion pieces of low-value goods (priced at less than 22 euros per unit) into the EU market, which is the equivalent of 12 million packages per day, 91% of which are from China.

The European Commission has emphasized that not only do these cheap imports pose unfair competition to local EU sellers who abide by the rules, but the transportation of large numbers of parcels also has a serious negative impact on the environment and climate.

Similar to the cancellation of the T86 policy in the United States, the EU will also have an impact on layaway sellers if it abolishes the policy of tax exemption for imported goods under 150 euros. On the one hand, the need to pay customs duties and VAT and the complication of the customs clearance process may lead to higher logistics costs, which will increase the logistics costs of sellers. More complicated customs clearance process may lead to longer delivery time, affecting the customer experience, the single volume will also be affected.

Translated with DeepL.com (free version)