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VAT and Customs Changes

From 1 July, the taxation for small shipments ordered outside of the European Union changes, and in the future, VAT must be paid for all commercial shipments, regardless of their value.

From 1 July 2021, the VAT exemption for small shipments sent from outside of the EU (i.e. third countries) is no longer valid. The aim of the amendment is to reduce VAT fraud and to ensure equal competitive conditions for the EU companies compared to third countries’ companies.

However, this means that submitting a customs declaration becomes mandatory for all goods ordered outside of the EU regardless of their value, and VAT is applied to all ordered shipments (currently, only shipments with value exceeding 22 euros are taxed).
 
Example: If until now, a 10-euro telephone case ordered from the Chinese portal AliExpress would have reached the buyer without any additional taxes or activities, then from 1 July, customs declaration must be submitted for this product and 20% VAT must be paid. Thus, with the added tax, the telephone case costs 10x1.2=12 euros.
Small shipments sent from one private person to another for free or as a gift with value up to 45 euros will remain exempt from VAT. However, a customs declaration must be submitted. 
In case of goods starting from 150 euros, customs duty is added in addition to VAT. In general, customs duty is not added if the item’s value is below 150 euros. Exceptions are alcohol, tobacco products, perfumes and eau de toillette. Depending on the product code, the customs duty rate is between 0 and 17% of the good’s value. Customs duty rate can be searched by product code from the Estonian customs tariff.
Please Note!
 
  • When taxing VAT, the delivery costs are included in the shipment value. This means that if you order a shipment worth 160 euros from the UK and shipping costs are 15 euros, then customs duty is applied for 160 euros and VAT is applied to the sum of the value of the goods, customs duty and delivery costs.
  • Keep in mind that taxation also depends on the time the goods arrive to Estonia. This means that even if the product is purchased from the e-store in May but arrives in Estonia in July, VAT must be paid and a customs declaration must be submitted.
  
Declaring the goods

Customers have two options for declaring the goods:  
  • authorise Omniva to declare the goods or
  • declare it in the Tax and Customs Board portal.
 
Omniva will develop an application for the Minu.Omniva.ee platform for more convenient declaration of goods, which also allows tracking incoming parcels, and authorise Omniva to declare the parcels for you and pay the necessary fees.

It is already possible to sign up in the minu.omniva.ee environment. This way you can conveniently declare your shipments once 1 July arrives. Currently, it is possible to perform all other parcel processes there and select preferred channels for receiving the parcel.
 

Pallasti 28, 10001 Tallinn, e-mail: info@omniva.ee Customer information: 661 6616