The conclusion that the payment of VAT in these situations was being unduly charged by CTT results from the analysis of several complaints on this matter that came to the attention of the ombudsman, Maria Lúcia Amaral, according to a note from the Ombudsman released today.
This situation led Maria Lúcia Amaral to send a recommendation to the chairman of the Board of Directors of CTT, Raul Galamba de Oliveira, asking that this practice be eliminated and clarifying that, in light of the legislation in force, goods shipped from a third country by a goods destined for another private individual “remain exempt from VAT when they are intended for personal/family use and have a value not exceeding 45 euros”.
The VAT code was subject to several changes through a law published in August 2020, including a measure that came to determine, as of July 1, 2021, the end of the VAT exemption that until then benefited from imports of low value goods (up to 22 euros).
However, recalls the Ombudsman, the legislation in force also establishes that “goods that are the object of small shipments of a non-commercial nature [occasional shipments, for personal/family use, with a value not exceeding 45 euros and sent without any type of payment (no. 2)], dispatched from a third country by a private individual to another private individual who is in the national territory, are exempt, upon importation, from value added tax and excise taxes”.
While the situation in which the VAT exemption for imports of goods worth up to 22 euros was eliminated concerns a commercial shipment (an online purchase, for example), with regard to the situation that contemplates values up to 45 euros are concerned with “non-commercial relationships between private individuals, which therefore include the sending of gifts, goods for personal use, and the like” – such as sending a gift, for example.
“While the first exemption was abolished as of July 1, 2021, the second [small non-commercial shipments] remained unchanged, with such shipments remaining VAT-free to this day,” explains Maria Lúcia Amaral.
The provider underlines that “not only does no revocatory rule refer to it, but the nature of this exemption does not fall within the material scope of Law No. 47/2020, of August 24: it has nothing to do with the universe of electronic commerce, rather, inscribing itself in the universe of relations between individuals residing in different parts of the globe and, more precisely, with regard to the national reality, between residents in Portugal and residents outside the EU”.
The analysis of the complaints that reached the Ombudsman’s Office revealed that, “in the understanding of CTT, which will correspond to current practice from 1 July 2021, VAT will have to be charged for customs clearance of extra-community remittances between individuals whose value does not exceed 45 euros, not operating the differentiation between the two exposed regimes”.
Such an understanding, writes Maria Lúcia Amaral, appears to be “unsustainable in the light of national and community law and seriously penalizing citizens”, noting that “the exemption in question also covers goods subject to a special tax regime (tobacco; alcohol; perfumes ; coffee and tea), provided that the respective shipment, between individuals, does not exceed the quantities legally established in article 2 of Decree-Law no. 398/86”.
CTT has 60 days to respond to Maria Lúcia Amaral’s recommendation – which was sent with the knowledge of the Tax Authority’s director of Customs Regulation Services –, saying that it was complied with or presenting detailed grounds in case of non-compliance.
This is just a straight translation from the link below, it’s a bit long winded.