Latvia receives many shipments every day from abroad, including third countries - especially from China. And although all these shipments must be declared from 2021, most of them have not been subject to customs duty so far.
Currently, commercial consignments from third countries must be declared and VAT paid in the EU. Shipments of up to €150 are exempt from customs duty.
"This way we are actually supporting third-country traders," said Irena Knoka, Head of the Customs Methodology Unit at the Customs Administration of the State Revenue Service (VID).
Another reason for such a tax is to protect the work of customs.
"There is a lot of resource spending on the customs side, on the authorities side. But the revenue is very small. That is why the European Commission is proposing to abandon this customs duty relief," explained Jolanta Krastiņa, Head of the Customs and Excise Division of the Ministry of Finance.
The customs duty will be applied to everything, whether it is a trinket worth one euro or an expensive electronics item.
The current proposal is to divide goods into groups:
- The 0% rate will continue to apply to paper products and works of art;
- 5% on toys, games, home accessories;
- 8% on silk, carpets, glass;
- 12% on cutlery, electrical goods and clothing;
- 17% could be set for food, drink and footwear.
Last year, the most popular third-country online shops sending goods to Latvia and which would be most affected by the new customs duty rule were AliExpress, Shein, Temu and the US health products shop iHerb.
The change is currently scheduled to take effect in 2028, but according to officials, things are not going as smoothly as hoped.
"We are now already in the second half of 2024. The beginning of 2028 is very, very close. And the EU customs data center has to be set up and it has to be operational. That is one. The second is that the platforms have to register," said Jolanta Krastiņa.
She admitted that the hitch was more technical than political, "because everyone understands that our traders need to be protected".
The new regime will continue to apply only to commercial consignments and, as before, gifts and donations up to €45 will not be subject to VAT or customs duty.
