Dr Charles Tannock

Member of the European Parliament for London

EP raises proposed thresholds to bring goods into EU tax-free

Agence Europe - 17 November 2006

On Tuesday 14 November, the EP adopted the report by British Conservative member Charles Tannock on the proposed directive concerning value-added tax (VAT) and excise levied on the import of goods by travellers coming from third countries. It sets the tax threshold at "330 euros" for travellers entering the EU with goods without quantitative limits. This threshold is set at "1000 euros for travellers using an air transport mode or travellers using a transfer boat or a cruise ship" over a distance of at least 50 km.

The Commission had proposed thresholds of 220 and 500 euros respectively (see EUROPE 9140). The EP proposes a revision of these thresholds "at least every five years" via the application of the higher value between the harmonised consumer price index or Eurostat data on the average inflation rate in the 25 Member States. The MEPs have increased by one year the age below which the Member States may reduce the above-mentioned financial thresholds. They do the same for the age below which tax for tobacco products, alcoholic drinks and fuel do not apply.

The EP sets a limit for tax exoneration at eight litres for wine, compared to four proposed by the Commission. It also believes that the Member States have the "right to control petrol pump tourism, which aims to avoid tax in their border regions". At the end of October, the Finnish Presidency unsuccessfully proposed the compromise of a single threshold for the levying of tax: 300 euros as opposed to 175 euros at the moment (see EUROPE 9298 and 9301). On 28 November, the Ecofin Council will examine the dossier. (mb)