New VAT rules for goods imported from the United Kingdom into the EU

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Note: this article covers goods shipped from the United Kingdom to consumers in the EU. Different rules apply in the UK: since 1 January 2021, for consignments worth £135 or less sold directly to customers in Great Britain, the seller charges UK VAT at the point of sale (GOV.UK).

VAT rules before July 2021

Until 1 July 2021, businesses inside and outside the EU selling goods to consumers in the European Union could bring goods into the EU without charging VAT, provided the shipment's value did not exceed €22 (the low-value consignment relief). The aim was to spare customs authorities from checking a large number of shipments for a small amount of potential tax revenue. EU-based sellers were at a price disadvantage because they had to charge VAT on goods shipped from within the EU, and the relief also encouraged fraud, such as understating the value of goods.

VAT changes from 1 July 2021

From 1 July 2021 the EU abolished the €22 VAT exemption for imports. From that date VAT is due from the first euro: either as import VAT paid on delivery or, for sales of up to €150 handled through IOSS, collected by the seller at the checkout. Goods shipped directly from the United Kingdom to consumers in the EU are therefore subject to VAT in the customer's country of residence.

Customs duty from 1 July 2026

The duty relief for consignments worth up to €150 was abolished with effect from 1 July 2026 (Council Regulation (EU) 2026/382). During the transitional period until 1 July 2028, a flat-rate duty of €3 per item applies to some consignments up to €150 – check the current guidance from the Polish customs authority (KAS) or the European Commission for its exact scope. Above €150, duty is charged at tariff rates. More: the end of the €150 relief on parcels from the UK.

The IOSS system — a one-stop shop for VAT

Declaring and paying VAT in every EU member state can be complicated, which is why the EU introduced the IOSS (Import One-Stop Shop) for imported goods in consignments worth up to €150. See IOSS: the new import simplification scheme in the EU.

If the seller is not registered for IOSS, the buyer pays the VAT and clearance-related charges on delivery. Registering for IOSS lets you collect VAT at checkout, so the customer faces no unexpected charges.

Registering for and using IOSS

IOSS simplifies the process: you file a single (monthly) VAT return, and the tax authority splits the tax between the member states. A seller established outside the EU generally has to use an intermediary established in the EU (the exception is for sellers established in countries that have a VAT mutual-assistance agreement with the EU, such as Norway, shipping goods from that country — Article 369m of Directive 2006/112/EC) — check the conditions for your business with the Polish tax authority.

Example: a company sells a toy to a German customer for €15. The seller can either not register for IOSS and tell the customer they will pay import VAT on delivery, or register for IOSS and charge German VAT at checkout.

Summary

If most of your sales to EU consumers are consignments of €150 or less, registering for IOSS usually minimises administrative costs and improves customer satisfaction. Shipments above €150 fall outside the scheme, so import VAT is handled in the usual way — see changes to import VAT in Poland and e-commerce imports from the UK: parcels and limits. Need help with shipments to the EU? Get in touch.

Frequently asked questions