VAT and Ecommerce news from around the world to help you stay up-to-date with the market.
HMRC has updated its guidance on when import VAT certificates (C79s) will be available for you to download:
“The certificates are available online every month, usually by the 10th working day. They will show the previous month in which import VAT was paid. For example, if you wanted to view a statement from March, you would need to wait until the 10th working day of April.”
You can find the complete guidance on HMRC’s website.
The lower house of Austria’s parliament has approved legislation that will add a new reduced rate: 4.9%. This rate will apply to essential food items, including:
The legislation has to clear the upper house of the Austrian parliament to become law. In the likely case that it will, the new rate will be effective from the 1st of July 2026.
The European Commission has fined Chinese e‑commerce giant Temu €200 million for breaching the EU’s Digital Services Act (DSA). The penalty follows a detailed investigation which found that Temu failed to adequately assess and mitigate the risks of illegal and unsafe products being sold to EU consumers. The Commission found that people shopping on Temu were highly likely to run into dangerous products. Mystery Shopping exercises found:
Temu completed a risk assessment in 2024, but the Commission found that it fell far below of DSA standards. Rather than using data from their own platform, Temu had used generic industry data to formulate their report. The result is that they have massively under-estimated their platform’s capability to deliver unsafe products into the hands of EU citizens.
Temu has been given until late August 2026 to submit a corrective action plan, though it has already stated that it disagrees with the decision and considers the fine disproportionate.
This month, the UK saw the conclusion of two court cases that once again demonstrated how specific VAT law is.
It turns out that how much VAT you should apply to marshmallows in the UK depends on their size. To be specific: their size impacts how they’re eaten.
Mini marshmallows are zero-rated as they’re considered an ingredient (to decorate cakes with, for example). Regular marshmallows are a confectionary, as they’re a “item of sweetened prepared food which is normally eaten with the fingers.”. That makes them standard rated (20%).
But what about giant marshmallows? Innovative Bites Limited, a wholesaler, argued that should be zero-rated. HMRC disagreed so much that they appealed the initial decision by the First Tier Tribunal (FTT) in 2022. The Upper Tribunal has now confirmed that decision, saving Innovative Bites Limited nearly half a million pounds in VAT.
In the end, it comes down to the fact that the giant marshmallows are sold for roasting over a fire, not for eating straight out the bag with your fingers.
Clearwater Hampers Ltd sells gift hampers with a mixture of food and drinks in them. The hampers come in a variety of containers from cardboard boxes to your traditional wicker basket. HMRC felt that the wicker baskets were substantial enough that they needed to be taxed separately - not considered secondary to the contents. For this reason, they rejected a repayment claim related to the contents of the lidded wicker baskets.
The FTT disagreed with HMRC’s conclusion. They found that from the perspective of the average shopper, the basket wasn’t the primary thing that they were buying. Instead, it's a nice way to present its contents – the gift they were actually shopping for.
As a result, the basket was deemed ancillary to the food and drink. It should follow their VAT treatment, even where the hamper includes a mix of zero-rated and standard-rated items.
A brief reminder that we’re now a month away from the implementation of the EU’s Small Parcel Levy. You might have seen this referred to as “the end of the EU’s de minimis”. Essentially, low value parcels (those worth up to EUR150) will no longer be exempt from import duties.
I was asked in a YouTube comment whether the Levy would apply to Northern Ireland. Afterall, Northern Ireland is still in the customs union for goods. I’ve been in contact with the Council of the EU, the House of Lords and HMRC. No one seems to know. I’m waiting to hear back from Lord Livermore. If we learn anything, we’ll let you know!
