EU IMPORT GUIDE

TAX   |   DE MINIMIS   |   ADMISSIBILITY   |   PROHIBITED/RESTRICTED   |   CUSTOMS VALUATION

Tax Considerations

The EU VAT Directive establishes framework for EU VAT rates, but it gives national governments the ability to set the number and level of rates they choose, provided that they follow two basic rules. Under new regulations, there are currently four different categories under which the VAT rates are assessed and collectively these rates are referred to as the “Standard Rate”, “Parking Rate”, “Reduced Rate”, and “Super Reduced Rate”.

The two basic VAT categories under the EU VAT Directive are:

Category 1: Standard Rates 

Each EU member state has the ability to set their own standard VAT rate that applies to imported goods and services, and it may not be lower than 15%. The standard rate for all goods and services is applied to all non-exempt goods and services and will be the applicable VAT amount for the vast majority of shipments through FlavorCloud.
Minimum standard VAT rate is 15%, and there is no maximum. [See Article 96 VAT Directive]

Category 2: Reduced Rates

Reduced rates may apply to a limited volume of FlavorCloud shipments as these rates generally include certain agricultural products, energy products and equipment, foodstuffs, hotel and cultural services, some pharmaceuticals when prescribed by a physician, periodicals, and books. An EU country can opt to apply one or two Reduced Rates but only to goods or services listed in the VAT Directive:

• may be applied to goods or services listed in Annex IIIof the VAT Directive. Doesn’t apply to electronically supplied services (Article 98(2) VAT Directive)
• must beno less than 5% (Article 99 VAT Directive).

IMPORTANT: If you feel your shipment may be subject to Reduced Rates, you can confirm using the European Commission’s VAT Search tool. Please note that the actual VAT rate is subject to frequent change without advance notice, and is entirely dependent on the commodity (HTS/CN code), country of origin, country of import, and time of import.

Special VAT Rates as of April 5, 2022: Super Reduced Rates and Parking Rates

The EU does allow individual countries to apply “Special Rates” essentially as multiple exceptions to the basic rules. These Special Rates are issued for historical reasons, transitional periods, and for gradual alignment of national laws.

This enables member countries to charge reduced rates under 5%, and even provides for 0% reduced rates for goods and services other than those listed in the directive (Articles 102-128 VAT Directive).

IMPORTANT: If you feel your shipment may be subject to Reduced Rates, you can confirm using the European Commission’s VAT Search tool. Please note that the actual VAT rate is subject to frequent change without advance notice, and is entirely dependent on the commodity (HTS/CN code), country of origin, country of import, and time of import.

Category 3: Super Reduced Rate

As of April 5, 2022, EU member states can now apply Super Reduced Rates of less than 5% to imports of a limited list of goods and services in certain EU countries. The update now allows for a zero-rate VAT scheme for certain products and services.

The Super Reduced Rate and the zero-rate can be applied to food, water distribution, pharmaceuticals, medical devices, certain feminine hygiene products, transport of people (including goods they carry such as luggage, bicycles, vehicles), books and magazines, and the supply and installation of solar panels. Application of this is restricted to seven categories of essential supplies of Annex III of the EU VAT Directive.

Category 4: Parking Rate

Sometimes referred to as “Intermediary Rates”, the Parking Rate is applied by some EU countries to certain supplies of goods and services that aren’t included in Annex III of the VAT Directive. These countries are allowed to apply reduced VAT rates on these supplies, provided that those reduced rates are no lower than 12%.

LINKS

https://taxation-customs.ec.europa.eu/vat-rates_en

https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32006L0112

https://europa.eu/youreurope/business/taxation/vat/vat-rules-rates/index_en.htm

https://ec.europa.eu/taxation_customs/tedb/vatSearchForm.html – searchable current EU VAT database

Admissibility (OGA/PGA) Background

Many products are subject to specific import requirements such as import licenses, permits, certifications, inspections, product/business, and other labeling requirements. These requirements are generally referred to as admissibility or OGA/PGA requirements (“Other Governmental Agency” / “Partner Governmental Agency”).

These admissibility requirements are subject to frequent change without advance notice, and is entirely dependent on the commodity (HTS/CN code), country of origin, country of import, and time of import. It is advised to regularly verify and validate admissibility requirements to ensure there are no import delays and to ensure the proper administrative steps are adhered to prior to shipment. Certain products are prohibited from being imported unless the relevant requirements/obligations are met. In many cases, significant fines, fees, delays, and storage charges can be assessed when these regulations are not followed. FlavorCloud always recommends our merchants verify import requirements at the sub-EU national level and/or with your commodity- and country-specific expert prior to shipping.

Admissibility (OGA/PGA) Resources

Certain commodities are prohibited or restricted depending on the country of import, country of origin, as well as the specific point in time in which the goods will be imported into the EU. Assessment of import requirements, specific to your products, can be done in the European Union by consulting the European Commission Taxation and Customs Union TARIC Consultation database.

The European Commission publishes an Integrated EU P&R List which aggregates multiple EU legislation and other regulatory publications which can be used to verify if any prohibitions or restrictions apply to your shipments.

These tools are published at the EU level, are non-exhaustive, non-binding, and subject to a detailed legal notice. FlavorCloud always recommends our merchants use these tools as a reference, and then verify at the sub-EU national level and/or with your commodity- and country-specific expert prior to shipping.

EU – Prohibited & Restricted Commodities for FlavorCloud Merchants

• Integrated EU P&R List
• European Commission Taxation and Customs Union TARIC Consultation database

Certain commodities are prohibited or restricted depending on the country of import, country of origin, as well as the specific point in time in which the goods will be imported into the EU. FlavorCloud always recommends our merchants use these tools as a reference, and then verify at the sub-EU national level and/or with your commodity- and country-specific expert prior to shipping.

Product Compliance and Serious Risks

EU Market Surveillance legislation, under Regulation (EU) 2019/1020, Decision 768/2008/EC, and Directive 2001/95/EC, applies rules and procedures to ensure protection of health and safety, consumer and environmental safeguards, and public security and interest considerations. These rules and procedures aim to ensure that non-food products do not danger EU consumers and workers. FlavorCloud customers shipping non-food products should review current requirements to ensure that EU Market Surveillance legislative and import requirements, generally testing, labelling, and marketing standards, are met.

Sanitary and Phytosanitary (“SPS”) Requirements

EU SPS legislation intends to protect humans, animals, and plants from diseases, pests, and contaminants. Summaries of EU Food Safety Legislation

Food Safety Body: European Food Safety Authority (EFSA) /

GENERAL SPS DATABASES AND RESOURCES:

• Alert System for Food and Feed (RASFF)
• Animal Tracing System (TRACES)
• EU Pesticides Database
• Plant Health Notifications and Interceptions (EUROPHYT)

GENERAL SPS RULES AND FLAVORCLOUD MERCHANT-SPECIFIC RESOURCES:

• Specific rules on organic production, labelling and control
• Single Market Program
• Methods of sampling and analysis for the control of levels of certain elements in foodstuffs
• Enforcing EU rules for the agri-food chain
• Combating fraud in the marketing of foods – restoring consumer confidence

FOOD LABELLING AND NUTRITION:

• Coffee and chicory extracts
• Specific rules on organic production, labelling and control
• Traceability of pre-packaged foods
• Production and labelling of organic products
• Marketing of seeds of agricultural crops
• Labelling of foodstuffs
• Genetically modified organisms — traceability and labelling
• Fruit juices and similar products
• Fruit jams and sweetened chestnut purée
• EU rules for the marketing of fruit plants
• EU rules on producing and labelling organic products (from 2022)
• EU labelling rules for honey
• Ecolabel

FOOD SUPPLEMENTS:

• Ensuring safe food supplements in the EU
• Vitamins and minerals

FOOD IMPROVEMENT AGENTS:

• Authorization procedure for additives, enzymes and flavorings
• Use of enzymes in foods
• Smoke flavorings — Safety Assessment
• Safe food additives
• Food flavorings

SPECIFIC FOOD GROUP DETAILS:

• Foods for special medical purposes
• Specific rules on organic production, labelling and control
• Foods for specific groups

NEW FOODSTUFF TYPES:

• New (Novel) Foods

FOOD PACKAGING & CONTAINERS:

• Active and intelligent materials and articles that come into contact with food
• Regenerated cellulose film wrappers in contact with food
• Recycled plastic packaging in contact with food
• Olive oil analysis
• Plastic materials and articles in contact with food
• Materials and articles in contact with food — good manufacturing practice
• Import of plastic kitchenware from China
• Food safety – safe food contact materials
• Ceramic objects in contact with foodstuffs

GENETICALLY MODIFIED ORGANISMS (GMOs):

• Authorization of genetically modified organisms (GMOs) in the EU
• Unauthorized genetically modified rice in rice products from China — emergency measures
• Regulating GM crops: EU countries’ rights
• Genetically modified organisms — unique identifiers
• Genetically modified organisms — traceability and labelling
• Genetically modified food & feed
• EU country flexibility in genetically modified organism cultivation
• Contained use of genetically modified microorganisms

PESTICIDES & FERTILIZERS:

• Fighting water pollution from agricultural nitrates
• Using sewage sludge in farming
• Supplementary protection certificates for medicines and plant protection products
• Safe insect repellents, disinfectants and other industrial chemicals (biocides) in the EU
• Safe and effective fertilizers on the EU market (from 2022)
• Safe and effective fertilizers on the EU market
• Pesticide safety on the EU market
• Pesticide residues in food and animal feed
• Pesticides in the EU — ensuring their sustainable use
• Protecting health and the environment from persistent organic pollutants

Organic Products

All organic products imported from countries outside the EU require a certificate of inspection. Customs ensures that this certificate is verified and endorsed by the competent authority before releasing the goods for import and free circulation into the EU.

For organic products originating in Chile, Switzerland, and the United Kingdom, the EU has specific trade agreements which outline the inspection, labelling, and import requirements.

Organic products originating from Argentina, Australia, Canada, Costa Rica, India, Israel, Japan, Tunisia, Republic of Korea, New Zealand, and United States of America are considered as being from “equivalent” countries upon import into the EU. Inspection and certification of organic products from these countries is completed by national authorities of the country of origin. This is because their standards and control measures have been assessed as “equivalent” to those in place in the EU.

For all other countries, inspection and certification is the responsibility of independent national control bodies or authorities. Importers of subject products should contact and comply with requirements of the appropriate national control body. Please note that there may be additional controls or requirements on products imported from some countries.

Medicines

All medicinal products for human use must be authorized either at Member State level or at EU level before they can be sold on the EU market. Please consult the European Commission’s Public Health resources.

Chemicals

Import of chemicals and chemical products into the EU are governed by multiple legislations. These cover chemical substances that can be found is mixtures or components of multiple commodities. Specific details can be found on the European Chemicals Agency (ECHA) website, the Rotterdam Convention Prior Informed Consent (PIC) page, the European Commission’s Ozone Depleting Chemicals repository, and EU’s Fluorinated Greenhouse Gases website.