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BREXIT

EXPLAINED: Why people in Germany are being charged to receive small parcels from outside the EU

New EU regulations mean people in Germany now have to pay VAT on parcels from outside the bloc. The Local spoke to experts to find out what those changes mean for you, and how to avoid paying more than necessary.

A man collects his post at a Deutsche Post Packstation in Germany.
A man collects his post at a Deutsche Post Packstation in Germany. Photo: picture alliance/dpa/Deutsche Post DHL Group | Deutsche Post DHL Group

Over the past few months, The Local has heard reports from Brits and their families that they’ve suddenly been faced with eye-watering costs for receiving parcels from the UK within the EU. 

“Our great grandson wanted to send us a small gift to say thank you,” Lindsey Troester, who lives in Baden-Württemberg, told The Local.

“Out of the blue a small parcel arrived. The DHL driver demanded a cash payment of just over €13 for import tax and handling charges, on the doorstep, so I had to find the correct money – which was a nightmare – or he would have taken it back to the Post Office.

“In the parcel was a mug, which was designed by our great grandson for a school project and a pair of men’s socks, about £10 in value. Back in the UK, my husband’s daughter was not very happy about it either. We all agreed that it was a rip off.”

As in Lindsey’s case, others have been taken by surprise by suddenly being asked to pay a fee on their doorstep – and some have been caught without the necessary cash needed to pay it.

READ ALSO: How sending parcels in Germany changed in January 2021

What exactly is going on?

Until June 30th, 2021, packages imported into the EU with a value of less than €22 were exempt from import VAT charges. That exemption was abolished on July 1st, meaning that VAT is now due on all goods imported into the bloc.

The EU says the change was made to combat fraud via the widespread under-reporting of the value of goods to dodge the tax, and to make things fairer for companies trading within the EU.


An employee of Deutsche Post sorts parcels in a warehouse. Photo: picture alliance/dpa | Christoph Schmidt

It was supposed to come into effect from the start of January, but was pushed back to July because of pandemic-related delays.

The rule is just part of a raft of reforms designed to update the EU’s systems and bring them in line with 21st-century global trading practices, where international e-commerce accounts for a large chunk of the market.

What does this have to do with Brexit?

In one sense, the changes have everything to do with Brexit, since if the UK hadn’t left the EU customs union it wouldn’t be a non-EU, or ‘extra-EU’ country.

It’s important to bear in mind, however, that the abolition of the €22 ‘low value consignment’ threshold that kicked in from July is an EU-wide regulation that applies to imports from every extra-EU country, not just the UK.

Nevertheless, the added fees are yet another consequence of Britain’s sudden transition to being a third-country nation, which has come as a nasty shock to many living abroad. 

READ ALSO:

“Brexit is the biggest pain in the neck,” said one reader “Free Trade, what free trade?”

Confusingly, after the UK left the EU customs union on December 31st, 2020, there was a brief six month window where EU residents were required to pay VAT on only those packages received from the UK that had value of over €22 – a threshold which was then reduced to zero on July 1st.

Until now I haven’t had to pay import VAT on any packages from outside the EU, regardless of their value. How is this possible?

It might simply be the case that your package slipped through the net – you technically should have been asked to pay the import VAT, but the customs authorities let it slide because they didn’t have the capacity to check every item.

Philip Munn, a VAT partner at the international tax and auditing firm RSM, also points out there is also a longstanding exemption for ‘personal imports’ (i.e., items you already owned) which remains in place with the new rules – so you shouldn’t be charged VAT, for example, to bring your existing furniture over to Germany from the UK when moving house.

I’ve noticed I’m also suddenly being charged import VAT for packages sent within the EU. What’s that about?

Sarah Shears, who heads up the VAT Group at the UK office of the global tax firm Andersen, says the changes that came in on July 1st also abolished what was known as the ‘distance selling threshold’ within the EU.

Previously, if EU suppliers selling to EU consumers imported goods with a total value of less than €35,000 per year into most EU countries (or €100,000 for Germany, Luxemburg and the Netherlands), they weren’t required to register for VAT in the buyer’s country, and could instead pay the VAT in the seller’s country.

A Deutsche Post employee loads a van with parcels during a night shift.
A Deutsche Post employee loads a van with parcels during a night shift. Photo: picture alliance/dpa | Christoph Schmidt

This meant that a savvy customer in, say, Sweden could buy products from a supplier in an EU country with a much lower VAT rate (e.g., Luxemburg), to shave off costs.

The replacement rules hold that EU suppliers who sell goods with a collective value of more than €10,000 per year across all countries throughout the EU must now pay VAT to the country where the buyer is based using the EU’s new VAT ‘One Stop Shop’.

But because the transaction is occurring within the EU, you can pay the import VAT up front at the point of sale and your goods won’t be held at customs (because, after all, you’re trading within the customs union) – so it’s possible you may not even have noticed the change.

How is the VAT charge calculated? Does it vary depending on where the package is sent from?

Each country has its own VAT rates for different items. In Germany, shoppers pay seven percent VAT on everyday essentials such as coffee, tea and pet food, and 19 percent on most other goods and services (though the separation between ‘essential’ and ‘non-essential’ items is often quite arbitrary).

When an item’s subject to import VAT, you’re adding up the value of the item, plus things like transaction costs (how much you paid for shipping), insurance, and import duty, and then calculating the VAT based on the total sum – so you’ll be paying higher German VAT on a laptop imported to Germany from the UK than the exact same brand of laptop bought in Germany.

On the Deutsche Post website, the company also informs customers that they will also face a “service fee” of €6 in exchange for the company passing on your tax payment to the customs office. 

“Shipment goods from countries outside the European Union are registered for customs purposes by Deutsche Post DHL and checked by the customs authorities,” they explain. “If duties are levied by customs for these shipments, these duties will be paid directly to customs by Deutsche Post DHL.

“When the consignment is delivered or handed over, Deutsche Post DHL then collects these charges from the recipient. Please note that Deutsche Post DHL currently charges a service fee of €6.00 (incl. 19% VAT) for the payment of the fee.”

A postal worker delivers a parcel in Baltrum, Lower Saxony.
A postal worker delivers a parcel in Baltrum, Lower Saxony. Photo: picture alliance/dpa | Sina Schuldt

The Local has heard, anecdotally, that some people have felt they are paying more VAT on packages from some non-EU countries than from others. This shouldn’t be the case, say Munn and Shears.

“Anywhere outside the EU, one would expect them to be the same,” says Munn – although he points out that under the terms of the Trade and Cooperation Agreement between the EU and the UK, products manufactured and sent from the UK are exempt from EU customs duties.

Munn also notes that many sellers pass the responsibility of collecting the VAT on to the freight forwarding agent (i.e., courier or postal service) carrying out the delivery, in which case that company will charge an additional, separate, handling fee.

What about presents? Do I really have to pay VAT on those?

That all depends on the value of the gift. 

The EU’s taxation and customs union website reports that private packages with a value of up to €45 “are not subject to prohibitions or restrictions,” and Germany’s customs and finance authority has also confirmed that gifts of up to €45 are not subject to customs duty or VAT charges.

That essentially means that, in Lindsey’s case, the family seem to have been charged in error. 

In addition, letters and cards should definitely not be subject to any VAT charge, say Shears and Munn.

A man sorts post in an office.
A man sorts letters in an office. Photo: CHRISTOF STACHE/AFP

So what can buyers in the EU do?

To go along with its new reforms, the EU introduced the ‘Import One Stop Shop’, or IOSS. Previously, non-EU sellers would have to register separately for VAT in each EU country they sold in. With the IOSS, they can now register for VAT just once, in whichever EU country they choose, in order to declare and pay VAT anywhere in the bloc.

The significance of this from a customer’s perspective, says Munn, is that with IOSS-subscribed suppliers the buyer can pay the import VAT at the point of purchase, avoiding the hassle of collecting the package from the courier or post office and paying an additional handling fee.

If you want to continue ordering products from a certain non-EU company, then, the first step is to ask them if they are signed up to the IOSS; and if they’re not, to ask them to do so.

Bear in mind that the IOSS can only be used for goods with a value of less than €150 – for items with a greater value, VAT will still need to be paid on delivery.

In those cases, says Munn, many sellers have calculators on their websites that give you an indication of what your total costs are going to be. “Essentially they’ll say you need to pay £1000 now, but don’t forget you’ve got €400-500 of duty and VAT and other things to pay before the goods arrive on your doorstep” he says.

For gift packages, The Local is continuing to look into the current rules in the EU, and will provide updates as we receive more information.

Member comments

  1. You write: “The EU’s taxation and customs union website reports that private packages with a value of up to €45 “are not subject to prohibitions or restrictions,” and Germany’s customs and finance authority has also confirmed that gifts of up to €45 are not subject to customs duty or VAT charges.”
    So why are we all being ripped off? My in-laws posted my daughter’s teddy over from the UK after she’d left it there. It’s an IKEA panda that costs around €1 new. I was charged €7 to get this parcel from a DHL post office. I knew I shouldn’t have to pay it, particularly as it was marked clearly on the small parcel that it was worth less than £5. So please tell us who we should be complaining to about these constant charges because it’s daylight robbery. Thanks

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For members

HEALTH

7 things to know about visiting a doctor in Germany

Going to the doctor when you're living abroad is a necessary part of life, but it can feel a little daunting. Here are some cultural quirks to look out for in Germany.

7 things to know about visiting a doctor in Germany

Germany is known for having one of the best healthcare systems in the world. 

But there are some cultural differences that can take a bit of getting used to when you’re not from the country. 

Here’s a look at what you should keep in mind. 

You might have to pay at the doctor

People used to a healthcare system that’s free at the point of contact, such as the NHS in the UK, may be a little confused if they are asked to pay money at a doctor’s appointment. 

But the fact is that certain things will not be covered by your health insurance in Germany, and some optional extras could require that you have to dip into your wallet. 

For instance, many gynaecologists may offer to carry out an optional pelvic ultrasound check during a Pap smear test. If it’s not covered by your insurance, they will state in the appointment that it is an extra cost so you can decide if you want to pay for it or not. 

You should also ask if you have to pay for it upfront at the practice or if it will be sent out as a bill. 

Similarly, other specialists may also offer extra services that you could pay extra for. 

READ ALSO: ‘It works’: Your verdict on the German healthcare system

You’ll get different types of prescriptions

Another point to watch out for is that there are different kinds of prescriptions. A prescription (Rezept) given out on pink slips is usually given to people on statutory health insurance. People have to pay a reduced contribution – usually around €5-€10 – when picking up prescription medicine at the pharmacy. 

Patients with private insurance in Germany are more likely to be given a blue-coloured prescription slip. Private customers have to pay for their medicines in full before their insurance company reimburses them. You can also be given a blue slip if your public health insurance doesn’t cover the treatment.

Green slips include treatment that the doctor recommends. Meanwhile, yellow prescriptions are issued by the doctor for special controlled substances and are only valid for seven days. 

Polite waiting room etiquette

Germans may not be well known for being super friendly. But there are a few unexpected spots which are very welcoming. And one of those places is the doctor’s waiting room. 

Yes, it can be very surprising for foreigners when they are greeted with a little “Guten Morgen!” or “hallo!” in the waiting room when someone arrives. It’s customary for patients to give a polite hello and goodbye in the waiting room.

A person being vaccinated against Covid-19 in Hamburg in 2021.

A person being vaccinated against Covid-19 in Hamburg in 2021. Photo: picture alliance/dpa | Christian Charisius

… But you may face a stern receptionist or doctor

Ask a group of international residents about their experience of going to the doctor in Germany – or indeed other German-speaking countries – and you will likely hear about how the bedside manner is “different”.

This is because some doctors, and even receptionists, have a stern and direct approach when dealing with patients, which can be intimidating for newcomers to the country.

It can also be a little weird if you have to take some clothes off for an examination. You probably won’t be handed a gown, towel or even asked to undress behind a curtain. Everything is out in the open in Germany!  

Don’t worry though – none of this is personal. It’s just a different way of doing things. 

If you do come across a grumpy doctor, the best way to handle it is to either accept it or find a different doctor.

Be prepared to wait

Most Hausarzt (GP) practices in Germany operate on a drop-in basis during set times, known as Sprechstunden (consultation hours).

This means you can simply pop in during a two or three-hour window. During these times, it’s also first-come, first-served.

The advantage of this system is that it’s possible to see a doctor, for example, on a Wednesday morning without an appointment, as long as you have time to wait.

But if you are in a rush, or have a strict schedule, then the drop-in approach can be time-consuming. Depending on when you arrive, it could mean a short wait of several minutes or up to an hour.

The best advice is to arrive just as the doors open to secure a place near the top of the queue.

You can also book an appointment or Termin. But even if you book, you’ll probably still face a wait of at least 15 minutes. 

You are usually referred to a specialist

In Germany, if you are covered by public health insurance, you usually have to visit a GP to be referred to a specialist doctor.

There are exceptions in some cases, such as for gynaecologists and ophthalmologists where you can make an appointment without a referral.

If you have private insurance you can book appointments with specialists more easily.

READ ALSO: How to get a faster appointment with a specialist in Germany

Visit (or call) a GP for a sick note

If you’re sick from work then you have to get a sick note – Arbeitsunfähigkeitsbescheinigung or Krankschreibung – after three days of illness to give to your employer. Some bosses may require this sick note earlier, so check your contract or ask HR. 

Generally, you have to visit your doctor to get this document. But during the pandemic, people have been able to get a sick note over the phone from their GP for mild respiratory illnesses, including Covid-19. 

READ ALSO: The 10 rules you need to know if you fall ill in Germany 

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