The transitional period of the United Kingdom for leaving the European Union ended on 1 January, which means that the customs union rules no longer apply to trade with the United Kingdom. This means that from now on travel to or from the UK, ordering parcels from the UK or trade between companies will be subject to customs procedures.
What will change for private individuals?
If you order goods from the United Kingdom it will be subject to additional taxation. If the value of the consignment is within the range of 22-150 euros, a customs declaration must be filed on e-MTA for such consignment and value-added tax must be paid. If the value of the consignment exceeds 150 euros, a customs declaration must be filed and value-added tax and customs duty must be paid. Customs duties will not apply if the seller of the goods is capable of proving that the goods are of United Kingdom origin. To do so, the seller must provide you with proof of origin of the goods that you can annex to the customs declaration of the goods.
If you have ordered any parcels in 2020 but these will be dispatched from the United Kingdom in 2021, you must declare such goods on e-MTA and pay taxes thereon where necessary. If, however, you have ordered the goods in 2020 and these were also dispatched in 2020 you do not need to declare anything. For instance, if you ordered goods from the United Kingdom on 15 December and the consignment was dispatched on 28 December, however the ordered items have not yet arrived in Estonia, you do not need to declare such goods and they will not be subject to value-added tax or customs duty. What is important here is the date when the goods were handed over to the transportation provider in the United Kingdom, such as an airline.
Goods sent by one private individual to another private individual free of charge (as a gift, for example) become subject to value-added taxation if the value of the goods exceeds 45 euros and subject to customs duty if the value of the goods exceeds 500 euros. If the value of the goods in the consignment exceeds 500 euros, exemption from duties will apply to goods that have proof of origin.
A traveller arriving from the United Kingdom may bring goods valued at up to 1,200 euros for personal use in Estonia on a customs duty exempt basis. If the value of goods exceeds 1200 euros, customs duty exemption will apply to goods that have proof of origin. A traveller may bring goods for personal use valued at up to 300 euros and travellers by air and sea up to 430 euros on a value-added tax exempt basis.
It is important to note that travel is subject to prohibitions and restrictions, which means certain goods can no longer be brought into the European Union, such as meat and dairy products. Everyone should review the information prior to travel that is provided on the websites of Estonian Tax and Customs Board and Ministry of Foreign Affairs regarding which goods are subject to tax exemptions and what the various restrictions are.
People who have been living in the United Kingdom and are planning to move back to Estonia must pass customs clearance procedures upon bringing personal property to Estonia. The application of tax exemptions is possible but we ask that you contact customs information ahead of time in order to clarify the conditions.
What will change for companies that engage in trade with the United Kingdom?
Whereas until now there was free movement of goods, now they are subject to customs formalities.
All goods arriving from or dispatched to the United Kingdom are subject to supervision by the customs authorities. All goods must be declared every time and taxes and duties must be paid on the goods upon importation (a combination of value-added tax, customs duties and excise duties depending on the goods). Customs declarations must be filed both in Estonia and in the United Kingdom – for example when exporting goods to the United Kingdom a declaration must be filed when the goods leave Estonia, as well as when the goods enter the United Kingdom. In Estonia all customs declarations are filed electronically via e-MTA.
Certain goods will become subject to prohibitions and restrictions and depending upon the nature of the goods certificates and licenses to the goods must be submitted. For example, agricultural products must meet European Union standards and corresponding documents must be annexed to the customs declaration. Therefore, companies must account for the extra time needed for the trade in goods
There is an exception involving Northern Ireland which is deemed part of the customs territory of the European Union. This means that the movement of goods between the European Union and Northern Ireland will continue as before. However, changes will occur if goods do not move directly between the European Union and Northern Ireland, therefore we strongly suggest that companies additionally review the protocol on Northern Ireland in case the movement of goods occurs via Northern Ireland.
According to the trade agreement between the European Union and the United Kingdom customs tariffs and quotas shall generally not be applied in mutual trade to goods of United Kingdom or European Union origin. This means that any goods that are produced or processed to a sufficient degree in the United Kingdom or the European Union are exempted from customs duties (rate of preferential duty of 0%). For that to happen the seller must issue a proof of origin to the buyer. If it is known that the goods are produced in the United Kingdom or processed to a sufficient degree but the seller of the goods is unable to issue the proof of origin yet, the customs duties must be paid but an application for refund may be made within three years if the trader submits proof of origin during that period.
New country codes will be adopted for customs clearance for the United Kingdom and Northern Ireland.
Transit of goods between the European Union and the United Kingdom occurs as part of the common transit procedure which significantly shortens the time needed for clearance at the border. As of 1 January 2021, the United Kingdom has the same status with regard to the transit procedure as Norway, Turkey and Switzerland.
We would like to point out that as a result of the United Kingdom leaving the European Union even those companies will be affected that do not engage in trade with the United Kingdom but instead declare goods for release for free circulation and in certain cases will need to document in the customs declaration that the goods were transported to the European Union prior to 1 January 2021.
More details are available about the new rules on the website of the Estonian Tax and Customs Board: https://www.emta.ee/et/brexit-eraisikud and https://www.emta.ee/et/brexit. If you have any questions, you are welcome to contact customs information by calling the telephone number 880 0814 or via email to the email address firstname.lastname@example.org.