The EU is moving forward with plans to impose customs duty on cheap goods in a shift that could hit imports from online retailers and harm a hoped-for London listing by the fast-fashion seller Shein.
The potential change comes amid growing disquiet among retailers based in mainland Europe, the UK and the US about rising competition from Chinese-linked marketplaces Shein and Temu, which exploit a loophole that excludes low-value items from import duty.
In the EU, the threshold for the levy is €150 (£127) and in the UK it is £135, enabling retailers such as Shein to ship products directly from overseas to shoppers in those markets without paying any import duty. In the UK, items valued at £39 or less also do not attract import VAT.
? under 150 euro the VAT is already automatically collected via IOSS, or it would be held at customs even if it’s declared as gift with 0€ value.
which exploit a loophole on low valued goods
In the article.
In the EU, the threshold for the levy is €150 (£127) and in the UK it is £135
In the UK, items valued at £39 or less also do not attract import VAT.
Last year, 2.3bn items below the duty-free €150 threshold were imported into the EU
But it’s not true. The threshold now is 0€, everything needs to pay vat since one year ago. Over 150€ it just can’t do the automatic ioss vat payment
This article from the Financial Times explains the problem.
In a nutshell this isn’t about VAT, it’s about “Customs Duty” which are apparently two separate things in the EU.
I’m in the United States and we’re struggling with this same issue. The flood of cheap goods being imported via TEMU / SHEIN that intentionally stay below the value required to pay import duty is large and growing problem.
It’s also bad for the environment in every way imaginable.
