EU AGREES ON NEW VAT APPROACH FOR E-COMMERCE IMPORTS
EU finance ministers have reached a political agreement on a new VAT framework for e-commerce imports, aimed at enhancing the Import One-Stop Shop (IOSS). The revised approach seeks to simplify VAT declaration and payment, ease administrative burdens for importers, and strengthen enforcement against VAT fraud.
The new rules extend the scope of IOSS to more distance sellers of goods up to €150, incentivising broader uptake. While IOSS remains optional, non-participating suppliers risk complex and costly VAT registration across multiple Member States. A fallback mechanism allows Member States to collect VAT directly from customers where suppliers fail to comply.
This marks a further step towards VAT and customs reform, supporting fairer and more efficient online trade. In 2024, over 4.6 billion parcels entered the EU from non-EU countries, with IOSS revenues rising to €26.3 billion in 2023. For a practical summary of this update you may also want to check the IOSS VAT fact sheet.
Source: European Commission