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Low VAT consignment stock relief under threat

  • VAT
  • 05 June 2014 | Richard Asquith

Low VAT consignment stock relief under threat

The European Union’s Expert Group reporting on VAT on the digital economy last week raised the question of the continuing suitability of the special VAT concession on small consignments of goods arriving from outside of the EU. The Group felt that with the rise of e-commerce, it was now distorting marketing in Europe and giving non-EU retailers an unfair advantage.

Low Value Consignment Stock Relief

In accordance with Article 23 of the EU VAT Directive, member state may exempt from import VAT small value delivers of goods to their consumers from outside of the EU. The Directive allows for a limit of between €10 and €22 per delivery. The purpose of the relief is to enable people to send small value packages across borders without a disproportionate compliance burden. The relief does apply to mail order (catalogue or online retail), but member states do have the option to withhold it to mail order retailers if it proves to be market-distorting.

A good example of market distortion was many online retailers moving their distribution centres to the Channel Islands which are not part of the EU. These retailers were then able to sell CD’s, DVD’s, books etc essentially VAT free to the UK and rest of Europe. This gave them an unfair advantage over EU-based retailers. The UK withdrew the mail order exemption on its Low Value Consignment Stock Relief (£15) in April 2012.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.