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EU Extends Reprieve From VAT, Customs Duties for Medical Imports

Posted on July 28, 2020

Medical products imported from non-EU countries for use in combating the COVID-19 pandemic will be exempt from VAT and customs duties for another three months, through October 31, the European Commission said.

According to EC decision 2020/1101 of July 23, member states have until December 31 to provide lists of organizations that qualify for the exemptions, the nature and quantity of goods imported under the waivers, and the measures imposed to ensure that items that have been imported qualify for the exemptions.

In its initial decision published April 3, the commission approved the exemptions retroactively from January 30 for requests submitted by member states between March 19 and March 26. It said the extreme challenges created by the COVID-19 pandemic qualify as a disaster under EU customs and VAT law.

Council Regulation (EC) No. 1186/2009 on customs duties and Council Directive 2009/132/EC on VAT "can be applied to imports by state organizations or approved charitable or philanthropic organizations" to provide relief for the “benefit of disaster victims," it said in a release accompanying the April 3 decision.

According to the release, the exemptions apply to masks, testing kits, and ventilators, among other types of medical equipment.

“We need a lot of this equipment, and it can be expensive," Commission President Ursula von der Leyen said in an April 3 video message. "That is why today we [decided] to eliminate, for a while, certain taxes on the import of medical devices and equipment from countries that are outside the European Union. . . . This is our contribution to easing the pressure on prices for medical and protective equipment and to making them more affordable.”

Von der Leyen said that before the exemptions, face masks and protective garments imported from countries like China were subject to a 12 percent customs duty and a 22 percent VAT. “We stand by our health workers and hospitals, and we will do all we can to help them further," she said. The exemptions make those imports one-third less expensive, she added.

EU Tax Commissioner Paolo Gentiloni said it is crucial that medical equipment is available to healthcare organizations during the pandemic. The exemptions will help make that happen, he said. "I want to express again my deep respect and gratitude to health workers across Europe," Gentiloni said in the April 3 release. "[This] measure should help them receive the equipment they need to protect themselves and continue saving lives.”

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