From May 25 until at least September 1, VAT no longer has to be paid on face masks. This applies to all types of face masks (both medical and non-medical) and to all sales. Face masks are currently still subject to the normal VAT rate of 21%.
For the zero rate to apply instead of an exemption, sellers retain the right to deduct input tax. This means that entrepreneurs can still deduct the VAT they pay upon purchase in the VAT return.
Customs duty exemption
In addition, personal protective equipment for healthcare can already be imported under certain conditions with an exemption from customs duties since mid-March. Government institutions, charities or philanthropic institutions, aid organizations, hospitals, care institutions and care providers in the BIG register can use the exemption if they have received a permit from Customs. This also applies to a private organization or a purchasing consortium that imports on behalf of the aforementioned institutions.
The policy decision regarding the reduction of the VAT rate to 0% will soon be sent to the House of Representatives.
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NAZALI TAX & LEGAL |