EU VAT changes: What happened to the €22 exemption?

If you have been buying from stores outside the European Union for a long time, you probably remember a rule that let you import small items without paying any tax. That rule changed in July 2021.

1. What was the €22 exemption?

Before July 2021, any package worth less than €22 could enter the EU without having to pay any Value Added Tax (VAT). It was a great deal for shoppers buying small things from AliExpress or eBay.

The EU removed this exemption to make things fairer for local businesses. Since July 2021, you have to pay VAT on every single item you buy from outside the EU, no matter how much it costs.

2. How do I pay VAT now?

There are two main ways VAT is collected for these small orders:

• At checkout (IOSS): Many big online stores use the "Import One-Stop Shop" (IOSS) system. They collect the VAT from you when you pay for the item. This is the fastest way because the package usually goes through customs without stopping.
• At delivery: If the store does not use IOSS, you will have to pay the VAT to the courier when the package arrives. They will also charge you a "handling fee" for processing the tax.

3. Does the €150 limit still exist?

Yes, but it only applies to customs duties, not VAT.

For packages worth €150 or less, you don't pay any customs duty. You only pay VAT. If your order is worth more than €150, you will have to pay both VAT and customs duty when it arrives in your country.

4. Why are couriers charging me extra fees?

When a courier has to process VAT for a package, they do some paperwork and sometimes pay the tax to the government on your behalf. They charge a fee for this service.

If you pay VAT at checkout, these fees are usually zero. If you don't, you might find yourself paying a €10 handling fee on a €5 item. This is why it is always better to buy from stores that collect VAT at checkout.

5. Can I avoid these taxes by marking it as a "gift"?

Not anymore. The rules for gifts have also tightened up. While some countries still allow small gifts (usually under €45) to enter duty-free, customs officers are much more likely to ask for proof of value now. If they think the package is a commercial order, they will charge you tax regardless of what the label says.