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.
Today’s measures take a two-step approach to support the provision of medical equipment, protective equipment, vaccines and testing kits:
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.
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.
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 end of 2022, or until an agreement is reached on the Commission’s pending proposal for new rules on VAT rates.