European Union Import VAT - A potted overview and perspective

The EU voted in 2015 that import Value Added Tax (VAT) was to be applied to e-commerce businesses selling telecommunications, broadcasting, and electronic services.

The assertion being that these products were slipping under the domestic VAT radar. As such, these goods were considered to be flooding the European market, and at the same time undercutting the sale/tax generated revenue of EU services and manufactured items.

In 2017, the EU voted to extend these regulations to include e-commerce sellers trading in all goods. This law came into effect on the 1st of July 2021.

Its stated premise in 2017 was to recoup the 5 billion Euro VAT lost in online sales every year, rising to a projected 7 Billion by 2020. In turn, protecting EU manufacturers and jobs from cheaper imports made with low cost labour, and a possible lack of environmental oversight.

The EU import VAT applies equally to all non-EU countries, every nation outside of the EU is viewed technically as a third country.

The UK was part of the EEC/EU from 1973 to 2020. As such, it took part in and agreed to the decision making within the EU. This naturally included being a willing signatory to the EU import VAT regulations of 2015 and 2017.

By leaving the EU on the 1st of January 2021, the UK effectively and unilaterally placed itself into the orbit of being a third country. We have our own views on the wisdom, or otherwise, of this action. In the parlance of lingua franca, nos yeux roulent vers le ciel.

As a consequence, goods supplied from the UK into the EU became subject to the new import VAT rules governing third countries. The same edicts apply to goods being imported into the UK from the EU and beyond.

Balanced against this cost and with direct reference to garments purchased from Westward Bound, the UK domestic sales VAT rate of 20% is removed on all sales into the EU.

Within the EU, the UK sales VAT saving is effectively replaced by the EU import VAT, paid on delivery. Given that the UK sales VAT would otherwise be charged, the overall difference in cost is marginal, if at all.

The Import VAT rate varies as per the sales VAT individually set by each of the 27 nation-states: e.g., Luxembourg 17%, Germany 19%, France 20%, Poland 23%, etc.

To facilitate the collection of EU import VAT, standard shipping agent costs of approximately £11 fall due upon delivery. This charge is mitigated by a saving of £9.25 P&P on orders above £350. Using the example of an order for the Ishtar Latex Catsuit, shown in the accompanying photograph, sent to Paris, France (import VAT @20%); the additional cost since EU import VAT became applied on the 1st of July 2021 is £1.75. The same logic applies when we purchase goods from the EU.

In line with EU regulations, 2017, and with effect from the 1st of July 2021. All goods sent to the EU are sold net of UK sales VAT and dispatched with EU import VAT due upon delivery. Delivered-at-Place (DAP). Product Description: Rubber Apparel. Commodity Code: 4015900000 Import VAT Calculator.

The country of origin of all our garments is the UK. As such, and in line with the EU-UK Trade Agreement, 2020, our clothing is not subject to duties/tariffs when sold within the EU.

Model Comtesse Léa. Photography by Rémi Cozot in Paris, France. Ishtar Latex Catsuit