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EU Trims Divergences on Definition of Christmas Tree Decorations

By: Elodie Lamer

 

A new legal text has come into force clarifying that for customs duty purposes, Christmas tree decorations do not need to be Christmas-themed but must be recognizable as decorative articles for Christmas trees.

 

The EU has a so-called combined nomenclature that it uses for classifying goods, which is a further development of the World Customs Organization’s harmonized system nomenclature. Among other things, it helps determine which duty rate applies when goods are declared to customs in the EU.

 

As winter and its festivities approach, the European Commission believed it would be helpful to further clarify what kinds of goods can be considered as associated with Christmas. An implementing regulation to that effect came into force October 13.

 

It further clarifies a previous clarification made in a 2016 implementing regulation. Back then, the commission explained that divergences remained on the scope of articles for Christmas festivities. Regarding Christmas tree decorations, the 2016 clarification said those articles were designed to be hung on a Christmas tree. “The articles must have a connection with Christmas," it said at the time. And that specific sentence caused further misunderstandings. “Divergent views exist on the interpretation of the wording of the last phrase” of the 2016 note, “which states that articles under that heading must have a connection with Christmas," the commission said in the new implementing regulation.

 

The same year, the Giftware Association explained that this “connection with Christmas” means that “items such as a soldier or a handbag are unlikely to now qualify as being Christmas tree decorations, even if they are on a hanging ribbon and imported for sale with other Christmas items. If, for example, they are made of plastic, the duty rate will be 6.5 percent and, if made of glass, the duty rate is likely to be 11 percent." For comparison, it added, Christmas festivity articles are duty-free if they are made of glass and taxed at 2.7 percent if they are made of other materials.

 

“In the interest of legal certainty, it is necessary to clarify that decorative articles for Christmas trees do not need to have a theme connected with Christmas but merely need a design that makes them recognizable as decorative articles for Christmas trees," the commission said in the new implementing regulation. The draft removes language requiring that the goods have a connection with Christmas.

 

As the Centre for the Promotion of Imports from developing countries said in 2020, European imports of Christmas goods are growing. “Between 2015 and 2019, European imports of Christmas articles increased from €1.1 billion to €1.2 billion, at an average annual growth of 2.3 percent," it said. According to the group, the EU accounts for around a quarter of global Christmas tree decoration imports.

Company Tax Notes
Category FREE CONTENT;ARTICLE / WHITEPAPER
Intended Audience CPA - small firm
CPA - medium firm
CPA - large firm
Published Date 10/19/2022

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