Germany Supports Closing Loopholes Favoring Chinese E-commerce Growth

By: Trademagazin Date: 2024. 05. 23. 10:49

Germany endorses a European Union proposal aimed at tightening the tax exemption rules that have aided the expansion of Chinese e-commerce platforms like Temu and Shein. Currently, packages valued under 150 euros entering the EU enjoy tax exemption, significantly benefiting these platforms by facilitating the sale of low-cost products. The German Finance Ministry supports abolishing this 150-euro tax-free threshold, which would aid customs authorities in managing the influx of low-value packages more effectively.

Chinese companies argue that their success is due to flexible supply chains and demand-driven business models, insisting they comply with all relevant regulations. However, Germany’s largest retail association, Handelsverband Deutschland (HDE), criticizes the current regulations for encouraging an overwhelming number of small package deliveries that customs cannot adequately inspect.

According to the European Commission, approximately two billion packages under 150 euros entered the EU last year, posing a significant challenge for customs authorities. The proposal to close this loophole has already received preliminary approval from the European Parliament and will be further addressed by future EU legislation.