Following imposition of revised tax policy
by Suresh Perera
With the European Union (EU) revising its tariff regime on postal shipments with effect from July 1, all postal packages up to EUR 150 (approximately Rs. 35,500) in market value mailed from Sri Lanka to any of the 27 member countries in the economic and political grouping will be subject to direct Value Added Tax (VAT).
The new tax policy will not be applicable to letters sent to EU member states, Post Master General (PMG) Ranjith Ariyaratne clarified.
However, postal customers, online sellers and marketplaces, which send items within the specified EUR 150 value will be liable to VAT, he said.
Postal goods that exceed the stated value will be subjected to other customs regulations as determined by the relevant government in addition to the VAT policy of the EU member country, the PMG explained.
He said that all applicable customs duties on postal items exceeding EUR 150 in value will be charged from the recipient of postal item/items at the destination.
Asked how the VAT component could be paid directly to the EU member country concerned, Ariyaratne said the payment can be done by registering online.
Customers can obtain all information about the tax policies, payment options and the procedures to be followed in terms of the relevant laws and regulations by accessing the relevant web links. (See below)
He said that customers should be aware of these policies, regulations and updates by referring to the web links before handing over their items to postal counters for onward delivery.
Asked on what basis the values on postal packages are calculated for taxation, the PMG said there is a variance depending on the category.
“The tax is applicable even to a personal gift item sent from Sri Lanka to a person living in any EU member country”.
All postal customers, including online retailers and online marketplaces, are required to provide the Import One Stop Shop (IOSS) ID Number with the parcel/postal item at the post office counter, to ensure smooth customs clearance and timely delivery of the goods to the destination.
In the event of non-compliance with applicable tax policies, the destination country reserves the right to add relevant taxes including VAT and other import tariffs. In addition, the recipient may have to pay an extra clearance fee according to the import rules and regulations of the destination country.
Additional charges at the time of import may cause the customer to refuse the goods. The customer is responsible for any further action taken by the Postal Administration or the Customs in respect of the relevant product.
The Sri Lanka Postal Department is not responsible for the imposition and collection of VAT or any other tax levied by the EU countries, the PMG stressed.
More information on the revised EU tax policy can be obtained by visiting the following web links:
https://europa.eu/youreurope/business/taxation/vat/vat-rules-rates/index_en.htm
https://ec.europa.eu/taxation_customs/business/union-customs-code/ucc-introduction_en
https://ec.europa.eu/taxation_customs/business/union-customs-code/ucc-legislation_en
https://ec.europa.eu/taxation_customs/business/vat/vat-e-commerce_en
https://ec.europa.eu/vat-ecommerc
