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COVID-19: Waiving VAT and customs duties on vital medical equipment

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Commission waives customs duties and VAT on the import of medical equipment from non-EU countries

The European Commission had already in April 2020 published a decision helping Member States affected by the coronavirus pandemic to temporarily suspend customs duties and VAT on protective equipment, testing kits or medical devices such as ventilators. This made it easier financially to get the medical equipment that doctors, nurses and patients desperately need. While the initial measure applied for six months, the exemption was subsequently extended three times, with the current provisions due to expire on 31 December 2021.

An indicative list of goods falling under the Commission decision is availablehere.

Background Information

Current EU legislation has exceptional tools available in order to help victims of disasters, which can be used to face the unprecedented health crisis caused by coronavirus.

EU customs legislation (Council Regulation (EC) No 1186/2009) provides for the possibility to grant duty relief for the “benefit of disaster victims”. It can be applied to imports by State organisations or approved charitable or philanthropic organisations. To grant relief, a decision from the Commission is required, acting at the request of the Member States concerned.

Similarly, EU VAT law (Council Directive 2009/132/EC) has mirroring provisions as regards exemption from VAT on the final importation of certain goods.

On 19 April 2021, the European Commission decided to prolong the temporary relieffor customs duties and VAT on the import of medical devices and protective equipment from third countries until 31 December 2021.

The duty and VAT free importation applies to:

  • State organisations (State bodies, public bodies and other bodies governed by public law including hospitals, governmental organisations, communes/towns, regional governments, etc.)
  • charitable or philanthropic organisations approved by the competent authorities of the Member States

VAT relief for COVID-19 vaccines and COVID-19 testing kits

On 7 December, EU Member States agreed important new measures enabling them to relieve EU hospitals, medical practitioners and individuals from Value-Added Tax (VAT) when acquiring coronavirus vaccines and testing kits. Based on a Commission proposal, the measure is designed to give better and cheaper access to the tools needed to prevent and detect coronivarus.

The rules will allow EU countries to put in place a temporary VAT exemption for COVID-19 vaccines and COVID-19 testing kits being sold to hospitals, doctors and individuals, as well as closely related services. Previously, Member States could apply reduced VAT rates on sales of vaccines but not a zero rate, while testing kits could not benefit from reduced rates. Under the amended Directive, Member States are able to apply either reduced or zero rates to both vaccines and testing kits if they so choose.

The rules will remain in place until the end of 2022, or until an agreement is reached on the Commission's pending proposal for new rules on VAT rates, if the latter occurs earlier.

For more information