TAXATION

Most imports to become pricier from July 1

most-imports-to-become-pricier-from-july-1

E-commerce deliveries from abroad will become more expensive as of next month, as all package imports will have to incur the value-added tax rate that applies in the destination country or territory according to a European Union decision applying to Greece, too, from July 1.

Furthermore, small packages valued at up to 22 euros each originating from non-EU countries and which are exempt from VAT until June 30, will also enter the new framework, as European Commission studies revealed that they create unfair competition and the tax evasion is estimated at €5 billion per year. Data show that every year EU member-states import some 150 million small packages.

Consequently consumers in Greece will have to pay VAT on the packages they receive, either 24% or 13% or 6%, depending on the type of commodity they have ordered.

The VAT charge on the small packages is based on their time of entry into the EU and not on the time of the online order or the start of the forwarding process by the seller. Therefore any individual importers or courier companies importing any packages as of July 1 will have to follow the legal customs procedure and pay – depending on the type of commodity imported – the VAT that applies.

What that practically means is, for example, that if a Greek resident orders a gadget costing €20 from China through any platform they will pay exactly €20 for it if it arrives in Greece (or another EU country first) by June 30. If the same product come no earlier than July 1, then the resident in Greece will have to pay tax amounting to €4.80 for VAT, taking the total cost to €24.80.

If the same product with the same value is ordered from France, it will set the Greek resident back €20 plus €4 by June 30, as the French rate of 20% will apply, but as of July 1 the cost will rise to €24.80 as the Greek VAT rate of 24% will start applying.

Still, this means a cut of costs for imports from EU countries with higher VAT rates than Greece’s, such as Denmark, Finland, Sweden, Hungary and Croatia.

This new system is set to introduce significant changes to the transactions of taxpayers who make online purchases. Finance Ministry officials say this will also help the state coffers.