Low-value packages from outside the EU no longer exempt from Czech import taxes

Sweeping EU reforms designed to simplify VAT (value-added tax) regulations for ordering packages from non-EU sellers have come into force in the Czech Republic as of October 1, 2021.

The good news is that the customs procedure has been somewhat simplified. The bad news is that VAT must now be collected on all non-EU shipments coming into the Czech Republic. Since 2011, items under €22 (about 560 crowns) had been exempt from this duty.

The new reforms were initially supposed to take effect across the EU from January 1, 2021, but that date was pushed back to July 1 to give member states some extra time to prepare. The Czech Republic took a little more time to approve the measures, and has now officially implemented them as of this month.

Along with the new regulations, many buyers will not need to worry about having to go through the Czech customs procedure themselves going forward.

Larger shops and non-EU sellers registered with the EU's new IOSS (One Stop Shop) initiative can now collect the appropriate amount of VAT (which differs by member states) from buyers at the point of sale. Czech VAT is currently 21%.

For smaller stores and individual sellers, however, consumers in the Czech Republic may still need to fill in a customs declaration online. If you haven't paid VAT at the point of sale, you probably need to fill in the customs declaration; you can also authorize your delivery provider (Czech Post, for example) to handle the customs procedure for you.

The customs declaration may also need to be submitted if goods arrive directly to the Czech Republic from a non-EU destination, even if VAT was paid at the point of sale. Most packages, however, make their way to the Czech Republic from other EU states, even when shipped from outside the EU.

"If [VAT] is included in the price of the goods in the e-shop, the electronic customs declaration can be filed by a carrier in another EU member state," Hana Prudičová, spokeswoman for the Czech General Directorate of Customs, tells CTK.

Note that while items under €150 (about 3800 crowns) are subject only to VAT, items above that amount are also subject to a separate duty tax (which differs based on the type of product) and must go through a separate customs process.

The new regulations are expected to result in additional VAT collections of up to €7 billion (182 billion crowns) per year. They have been designed to level the e-commerce playing field between EU sellers that are required to pay VAT, and non-EU sellers who have not.

According to Czech Post, 28 million VAT-exempt packages from shops outside the EU arrived in the Czech Republic in 2019.

Full details on the new EU regulations that have gone into effect can be found on the website of the European Commission.

More information about Czech customs procedures, and steps for filling in a customs declaration, can be found at the Czech Customs Administration.