COVID 19 - Exemption from customs duties and VAT of goods necessary for the fight with the pandemic

For the purposes of fighting the pandemic of COVID 19 and in connection with requests submitted by many member states that have announced a national state of emergency, on 3 April 2020 Decision(ЕС) 2020/491 of the European Commission has been issued by means of which the import from third countries of goods necessary for the fight with the implications from COVID 19 pandemic shall be exempt from customs duties and value added tax (VAT) in 2020 under certain conditions.

In compliance with the above-mentioned Decision in State Gazette, issue 39 of 28 April 2020 Ordinance No. 80 of the Council of Ministers of 23 April 2020 for Supplementation of Ordinance No. 75 of 06 April 2007 on the Application of Art. 43 – 52, 53, 55, 57, 59, 61, 67, 68 and 74 of Council Regulation (ЕC) 1186/2009 of 16 November 2009 setting up a Community system of reliefs from customs duty (further the Ordinance) has been issued. The Ordinance provides for the rules for applying Decision (ЕС) 2020/491 of the Commission.

The exemption from customs duties and VAT shall apply to the goods listed in an appendix to the Ordinance, which are necessary for the fight with the implications from the COVID-19 pandemic in 2020. The list includes medical equipment (respirators for intensive care, artificial lungs for reanimation, etc.), protective masks and helmets, protective clothing, medicaments and other similar goods.

The exemption from customs duties and VAT shall apply to governmental bodies and organisations, approved by the respective competent bodies, when they import goods listed in the appendix that will be used for:

• Free of charge distribution by the bodies and organisations to persons that have been affected by or are endangered by COVID-19 pandemic, or participate in the fight with it, or

• Free of charge distribution to persons that have been affected by or endangered by COVID-19 pandemic or participate in the fight with it while the goods remain property of the respective bodies or organisations.

The Customs Agency shall provide to the Commission before 30 November 2020 the following information:

1. List of the approved organisations, which have been exempt from payment of customs duties and VAT. The approval of the organisations shall be done by an order of the minister of health based on a written application by the respective organisation under the procedure provided for in Ordinance No. 75 of 6 April 2007;

2. Information on the substance and quantity of the different goods that have been exempt from customs duties and VAT;

3. The measures undertaken for ensuring compliance with Art. 78, 79 and 80 of Council Regulation (ЕC) 1186/2009 of 16 November 2009 setting up a Community system of reliefs from customs duty and of Art. 55, 56 and 57 of Council Directive 2009/132/ЕC of 19 October 2009 on determining the application scope of Art. 143, „b“ and „c“ of Directive 2006/112/ЕC with respect to exemption from VAT of the final import of certain goods, with respect to the goods within the scope of the Ordinance.

The use of the exempt goods for purposes different from the fight with the implications from the COVID-19 pandemic in 2020 is not allowed.

The Ordinance shall apply to goods imported in the period from 30 January till 31 July 2020.

The Ordinance does not contain rules for the reimbursement of the already paid duties and VAT imported in the period from 30 January 2020 till the date of its entry into force (2 May 2020). Our understanding is the reimbursement shall be made ex officio or after submitting an application by the respective bodies or organisations to the competent customs authorities.

This material is prepared for informative purposes and shall not be considered as individual advice or consultation. Should questions arise or if you need further information, please do not hesitate to contact us at tel.: 02/943 37 00, fax: 02/943 37 07, е-mail: office@afa.bg or at: 38, Oborishte Str., Sofia 1504.