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. The initial measure applied for a period of six months, and was further extended. On 28 October 2020, a further Commission decision prolonged the exemption on imports to the EU27 Member States until the end of April 2021. For the UK, the exemption is prolonged until 31 December 2020.
An indicative list of goods falling under the Commission decision is available here.
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 28 October 2020, the European Commission decided to prolong the temporary relief for customs duties and VAT on the import of medical devices and protective equipment from third countries until 30 April 2021. This allows imports carried out during the incipient phase of the outbreak to also benefit from the exemption.
The duty and VAT free importation applies to:
The Commission has proposed on 28 October 2020 that hospitals and medical practitioners should not have to pay VAT on vaccines and testing kits used in the fight against coronavirus.
Currently, Member States can apply reduced VAT rates on sales of vaccines but cannot apply zero rates. For now, testing kits cannot benefit even from reduced rates.
Once agreed by all Member States, the new rules would allow a temporary VAT exemption to be given to vaccines and testing kits being sold to hospitals and medical practitioners, as well as closely related goods and services. Member States would also be able to apply reduced rates to testing kits if they so choose.
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