Taxation and Customs Union

COVID-19: Commission puts forward taxation and customs measures to support access to more affordable equipment, vaccines and testing kits

On 28 October 2020, the European Commission adopted further measures in the area of taxation and customs to tackle the ongoing coronavirus pandemic.

First, a Commission Decision prolongs the current temporary relief from customs duties and Value Added Tax (VAT) on the import of protective and medical equipment from non-EU countries. Secondly, the Commission has proposed that hospitals and medical practitioners should not have to pay VAT on vaccines and testing kits used in the fight against coronavirus. These measures are designed to give Member States better and cheaper access to the tools they need to prevent, detect and treat coronavirus.

The Commission has also contacted all customs authorities to underline the importance of thorough quality controls on these goods, in particular on protective masks. In addition, the Commission has informed Member States of the possibility to use EU customs laboratories to share the analytical capacity.

The coronavirus pandemic has required an extraordinary response from all actors and policy areas. EU taxation and customs policy plays an integral role in facilitating access to crucial medical supplies, while also ensuring the safety of the goods that reach the EU market.

In detail
 
Today’s measures take a two-step approach to support the provision of medical equipment, protective equipment, vaccines and testing kits:

  • First, the current temporary waiver of customs duties and VAT on imports of medical devices and protective equipment will be prolonged, to help in the fight against coronavirus. Today’s Decision will prolong the exemption on imports to EU Member States until the end of April 2021. The prolongation was made after consultation with Member States and as a response to the increased number of coronavirus cases reported in the entire EU. Member States still need to import those goods from third countries.

Protective face masks are the most imported of these goods by far, accounting for almost 50% in value of all imported goods under the Decision. This is why, for these goods, the Commission has established more detailed customs tariff codes, to enhance the monitoring and quality controls of imported masks and therefore safeguard the protection of the healthcare workers and citizens. In addition, in order to enhance the quality controls of imported masks, the Commission has also informed the Member States of the possibility to share, with the support of EU funding, the existing analytical capacity within the Customs Laboratories European Network.

  • Second, the Commission is today proposing to grant VAT relief to sales of coronavirus vaccines and testing kits to hospitals and medical practitioners. Currently, Member States can apply reduced VAT rates on sales of vaccines but cannot apply zero rates. Testing kits cannot benefit from reduced rates at the moment.

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.  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.

Next steps:

The exemption from customs duties and VAT on imports of medical and protective equipment from non-EU countries, which has been applicable from 30 January 2020, will continue to apply until 30 April 2021.


As regards the VAT relief for vaccines and testing kits, once agreed by all EU Member States, it will remain in place until the World Health Organisation declares the end of the coronavirus pandemic, or until an agreement is reached on the Commission’s pending proposal for new rules on VAT rates.       

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