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Law360 (April 20, 2021, 12:17 PM EDT) -- The temporary exemption from value-added tax for medical devices and personal protective equipment intended to aid in the fight against the ongoing coronavirus pandemic has been extended until the end of 2021, the European Commission announced Tuesday.
The European Union had suspended the collection of import VAT on items such as personal protective equipment, testing kits, ventilators and key medicines beginning in May 2020. On Monday it extended the exemption.
"Despite the start of vaccination in all member states and a number of measures taken to prevent the spread of the virus, the number of COVID-19 infections in member states still poses public health risks," the commission said in its decision Monday. "As shortages of goods needed to combat the COVID-19 pandemic are still reported in the member states, it is necessary to extend the period of application of relief from import duties."
Significant amounts of medical supplies are still being imported into the European Union to help deal with the coronavirus pandemic, according to the commission. The decision to extend the exemption will enable countries to continue to have access to necessary equipment at a discounted rate, it said.
"The measure will continue to support member states financially in getting equipment such as masks or ventilators to the medical staff and patients that need them most," the commission said in a statement.
The tax-free importation of medical supplies will apply to state organizations, such as national health services, and other government entities — as well as charitable and philanthropic organizations, the statement said.
The decision to extend the suspension of import VAT and certain customs duties follows a proposal by the commission last week to exempt goods and services rendered by arms of the EU to its member countries in times of crisis, such as public health emergencies.
"The initiative will maximize the efficiency of EU funds used in the public interest to respond to crises, such as natural disasters and public health emergencies," the commission said.
The European Commission did not immediately respond to a request for comment.
--Editing by Vincent Sherry.
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