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16
06
2021

Loud and clear: How much do I have to start paying in taxes for goods ordered from China, the US and UK?

From 1 July, all commercial shipments ordered from outside of the EU are subject to tax. This means that the currently valid tax exemption for goods costing up to 22 euros will no longer be valid and all shipments arriving to Estonia from third countries must be declared.
 
Taxation is based on whether the goods are registered as having arrived in the EU before or after 1 July. This is based on the date when the item physically arrives to Estonia, not the date of ordering or mailing. Since the tax amendment is enforced across Europe, the number of orders has increased over the past months and delivery times are longer than usual.
 
How to calculate the tax of the ordered item.
 
The cost of shipping the goods and other import taxes (if applicable) are also taken into account when calculating VAT. For example, if you order a 3 euro phone case from AliExpress and the shipping cost is 2 euros, then you will have to declare the shipment and pay 20% VAT for it, which in the case of this example is (3+2) x 20% = 1 euro. Since the goods’ value is less than 150 euros in this case, no customs duties apply.
 
In case of goods costing more than 150 euros, customs duty must be paid in addition to VAT. Depending on the goods’ code, the customs duty rate is between 0% and 17% of the goods value. You can find the customs duty rate using the goods’ code from the Estonian Master Tariff System. Shipping cost is included in the customs duty calculation. If customs duty is applied, the VAT is calculated from the sum of shipment value, customs duty and shipping cost. 
 
As an exception, gifts with value up to 45 euros sent from one private person to another are exempt from VAT. Nevertheless, the goods need to be declared even if VAT is not applied.
 
Similarly to commercial shipments, customs duty must also be paid for gifts costing more than 150 euros. In case of private person gifts costing 150-700 euros, a single customs duty rate of 2.5% can be used. In case of gifts costing more than 700 euros, customs duty rate must be searched from the Estonian Master Tariff System using the goods code.
 
The tax amendment is based on the EU’s decision, the aim of which is to reduce VAT frauds and ensure equal competitive conditions for the region’s companies compared to companies of third countries.
 
Read more about the tax amendments and declaring obligation enforced from 1 July on the Omniva webpage.
 
 

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