Maltapost has opted to waive processing fees for items that have had VAT paid at checkout, with the postal company saying the change will cut costs and speed up delivery of online goods bought from outside the EU.

“We had prepared ahead for these changes so that the impact on the local consumer will be as minimal as possible and in many cases even beneficial.  

“Local consumers can continue enjoying shopping online from their favourite merchants,” Maltapost chief operations officer, Adrian Vassallo said.

As of July 1, VAT started being charged on all purchases from non-EU countries, irrespective of the value of items.

Before July 1, items under €22 bought from outside the EU were exempt from VAT. The introduction of VAT on all items follows new regulations introduced by the European Commission, aimed at increasing price transparency and competitive trade for digital consumers in the EU.

Major retailers sign up for IOSS

Contrary to public perception, this will not always make the online shopping experience more pricey or complicated, Vassallo explained.

This is because, in order to facilitate the payment process, a new scheme – IOSS (Import One Stop Shop) – has been introduced allowing people to pay VAT directly to the online seller on point of sale for items worth up to €150.

Mail handlers sort packages in December 2020. Photo: Matthew Mirabelli

Major online retailers such as AliExpress, Joom and Wish are all IOSS-registered, facilitating the buying process for customers by automatically collecting EU VAT on purchases.

Consumers can find information on whether VAT is included or not on the seller’s website, usually in the delivery details or in the FAQs.

Watch out for third-party merchants

Vassallo added that customers just need to be aware of the fact that some of the major online retailers may allow purchases through third-party merchants.

If these merchants do not provide the platform’s IOSS number as part of the online declaration when sending the item, then charges would still apply in Malta and the customers would need to claim the VAT back from the seller.

So, while the value of the item may now look more expensive on check-out, due to the added VAT (in the case of IOSS-registered merchants), Maltapost has waived handling charges on items under €150 from online merchants that are IOSS registered, despite the fact that they need to also declare IOSS items to customs.

If an item's customs declaration is correct, VAT has been paid at check-out and there are no objections by Customs, then it will be immediately delivered to the buyer’s address without additional charges once it arrives in Malta.  

However, for items purchased from a supplier that is not IOSS registered, buyers will have to pay VAT and processing fees before the item can be delivered. 

Such fees are charged by all European postal and courier operators when goods are imported in the EU.

What are the processing fees?

Maltapost provides services to simplify customs clearance and speed up the delivery process.

There is an administrative fee that Maltapost charges to cover the costs of collecting the required documentation, presenting them to the customs authorities, clearing dutiable goods on the customer’s behalf and effecting the payment of the customs dues and VAT.

MaltaPost processing fees.

Customs controls apply when purchasing goods from non-EU countries.

This means an item might be held by the customs authority at entry, pending the payment of duty and tax.

Imports may also need to be inspected and cleared by the following directorates to check for prohibited or restricted items: the Veterinary Border Inspection Posts (BIP), Port Health Medical Services (PHO) – Ministry for Health (Doctor and Food), Plant Health, Gold Consul, Intellectual Property Rights (IPR), Malta Competition and Consumer Affairs (MCCAA), Malta Communications Authority (MCA), the Environment and Resources Authority (ERA), Heritage Malta and the Malta Police Force.

This additional clearance comes at an extra charge that ranges from €2 to €5 per entity.