The European Commission adopted a new decision - Decision 2020/491 of 3 April 2020 - to grant relief from import duties and import VAT for those goods that are needed to combat the effects of COVID-19 in 2020.
Council Regulation 1118/2009 on Customs Duties Relief and VAT Directive 2019/132/EC both allow for relief, respectively from customs duties and import VAT on goods, in the event of special circumstances.
Because of the COVID-19 crisis, the Commission decided to grant relief to certain goods that are imported into the EU. In order to qualify, the goods must be imported by state organizations or approved charitable or philanthropic organizations. In addition, they must be distributed or made available free of charge to persons affected by or involved in fighting COVID-19.
The Decision does not define which goods qualify. Keeping in mind that each Member State may exercise discretion, the Commission published a list of goods as guidance. This non-exhaustive, indicative list covers a variety of goods, ranging from basic hospital equipment to personal protective equipment (PPE), medical devices, medicines, primary alcohols and acids, such as:
single use drapes;
masks, gloves and coveralls;
respirators, ventilators and monitors;
pumps and tubes;
humidifiers;
thermometers;
soaps, hydroalcoholic solutions and hydrogen peroxide;
medical consumables (e.g., syringes and needles);
test kits (instruments and apparatus used in diagnostic tests);
medical sterilizers;
certain medicines (e.g., paracetamol and hydrochloroquine);
formic acid.
The relief is only temporary: from 30 January 2020 until 31 July 2020. As COVID-19 was declared a Public Health Emergency of International Concern on 30 January 2020, the Commission gave retroactive effect as of that date.
Please note that, while the payment of VAT and customs duties is immediately suspended upon importation of the goods, the definite exemption is dependent on the a posteriori approval of the Commission. Consequently, the grant of the exemption is subject to the declarant's commitment to pay duties and taxes in the event they become due on the basis of the final decision of the Commission.
Finally, also within Belgium, certain goods can be donated VAT-free because of the adoption of Belgian Circular No 2020/C/46 of 24 March 2020. This temporary VAT measure applies until 30 June 2020, benefitting the following categories of goods:
medical devices as described by Belgian Royal Decree of 18 March 1999 regarding Medical Devices; and
personal protective equipment (PPE), such as masks, protective clothing, gloves and hand sanitizers.
Medicines are not included. Unlike the decision taken by the Commission, only donations to hospitals and approved healthcare institutions are covered by the Circular.
PwC Legal can assist you in determining what this means for your business and how to act. Please contact Tim Van Sant or Karolien Vandenberghe for further information.
