Treasury considers collecting GST on all online shopping

Thursday 28 January 2021

The GST 'de minimis' level could be reduced further or even disappear as the Treasury seeks to follow the EU and UK policies on collecting taxes on imported goods.

The department has launched a review which will consider ways to allow offshore retailers to charge GST on all goods sent to local customers, regardless of their value.

The existing GST 'de minimis' level - the price at which GST is charged on goods imported for personal use - is not a “tax relief”, the Treasury said, but instead was created to ensure that tax on personal goods was only collected when it represented good value-for-money to do so.    

The 'de minimis' level was reduced from £240 to £135 last October.

Pictured: The 'de minimis' level was reduced from £240 to £135 in October.

The Treasury review comes as the EU and UK are set to introduce changes in the summer following Brexit.

Since leaving the EU, the UK is no longer subject to EU rules on VAT and all imports into the UK will soon be subject to VAT regardless of their value. 

For goods less than £135, the VAT will be paid when purchasing the product, at the point of sale. For goods over £135, it will be paid when the goods arrive in the UK. 

Likewise, any goods imported into the EU will be charged VAT regardless of their value.  

The Treasury said it is “long-standing Government policy to be a fast follower of the EU and UK in collecting taxes on cross-border sales more efficiently and effectively."

The review will consider the new EU and UK arrangements for charging VAT, and determine the extent to which Jersey can use similar methods to charge GST on privately-imported goods.    

The review will also look for ways to simplify the process of paying GST on imported goods when offshore retailers cannot charge GST at the point of sale.  As a result, the GST de minimis level could be further reduced, or eliminated, the Treasury said. 

As part of the review, the Treasury said they will consulting key stakeholders, including groups representing freight forwarders, local and offshore retailers, and consumer organisations. 

Pictured: Any changes recommended by the review will be presented to the Minister for Treasury and Resources later this year.

Any changes recommended by the review will be presented to the Minister for Treasury and Resources later this year.    

“The Government has a long-standing commitment to provide a level playing field for retailers by ensuring fair tax competition between offshore and local sales of goods,” Deputy Susie Pinel, said.

“We know that de minimis levels are gradually being removed across the globe, which now makes it more probable that Jersey can follow suit without running the risk of offshore retailers deciding not to compete in our marketplace.”