Import VAT on medical supplies

Import VAT on medical items to be waived in the EU

April 9, 2020 in European VAT, News

The waiving of import VAT on medical items in the EU will come as welcome relief to many

Import VAT on medical supplies

As demand for supplies skyrockets, measures like this will be vital in supporting those in the fight against COVID-19.

On 3rd April 2020, the European Commission officially announced that medical items needed to battle the virus would no longer be subject to import VAT.

This decision came in response to requests made by EU Member States. The waiver will apply to all EU countries as well as the UK.   

What goods will this apply to?

In her statement, Commission President Ursula Von Der Leyen specified that the need for equipment is high but is costly for organisations. The removal of import VAT will decrease the cost of importing goods such as:

  • Ventilators
  • Testing kits
  • Protective gloves
  • Masks
  • Overalls

Thanks to Article 51 of the VAT Directive, goods imported in the EU for the benefit of disaster victims can benefit from VAT exemption. The European Commission will use this legislation to ease financial strain on organisations tackling the virus. Hopefully, this will help to ensure that the public and carers have access to the equipment they need.

The conditions under which goods can be exempt from import VAT are the following:

  • The goods are to be distributed free of charge by State bodies and approved organisations to the persons affected by or at risk from COVID-19.
  • The goods are imported to be free of charge to patients while remaining the property of the state and approved organisations.

The relief on import VAT will remain in place until 31 July 2020. As the situation develops, this will be subject to review by Member States before that date.

Member States will be required to submit a list of organisations approved for this VAT relief by 30th November 2020. They will also need to communicate the nature and quantities of goods admitted free of import VAT.

For more on information on what measures have been put in place by tax authorities, read our Practical guide to VAT during the COVID-19 pandemic.

If you have any additional questions please contact our expert team today.

17/04/2020 Update on VAT rates on protective equipment:

Austria

The Ministry of Finance of Austria has announced this week that the supply and acquisitions of respiratory masks in Austria will be reduce rated from 20% to 0%. This measure applies from 13 April 2020 to 1 August 2020 and aims to make protective masks as cheap as possible for citizens to use. Particularly with the reopening of businesses in the next few weeks, the need for respiratory masks will be increased.

France

Likewise, France is looking at reducing the VAT rate on protective masks from 20% to 5.5%. This measure was being voted on 17 April 2020 by French MPs. This is a way to reduce the costs of protective equipment for citizens and businesses and anticipate the increased demand for masks ahead of the gradual end of the lockdown.

28/04/2020 Update:

Ireland

Ireland has also announced the temporary VAT zero rating of supplies of medical equipment for the treatment of patients of Covid-19.

The zero rate will only apply to supplies of PPE and medical equipment intended to hospitals, nursing and care homes, GP practices and other health care establishments treating Covid-19 patients. When these goods are supplied to any other operators, even if they are intended for onward supply to a health care provider, they will be subject to the standard rate.

This measure will be effective from 9 April 2020 up to 31 July 2020 and will be subject to review.

Spain

On 22 April 2020, the Spanish Government approved the application of zero rate to the supplies, importations, and intra-community acquisitions of PPE and certain medical equipment intended for hospitals and other medical centres. This measure takes effect from 23 April 2020 until 31 July 2020.

05/05/2020 Update:

Belgium

As just announced by the Belgian authorities, the reduced VAT rate of 6% will apply to hydroalcoholic gels and protective masks from May 4 until December 31 2020. This reduced rate applies to the supply, intra-community acquisitions and imports of these items in an attempt to make these essential goods more accessible to everyone in the context of the fight against Covid-19.

For more on VAT in the time of COVID-19, please read our practical guide.

This is a post by Louise Boussemart, VAT Researcher at SimplyVAT.com

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