On May 17th 2023, the EU Commission published its proposal for a reform of the EU Customs Union.
The proposed measures aim to simplify customs processes for business with the use of technology replacing traditional declarations with a smarter, data-led approach to import supervision.
Some of the proposed measures have implications on VAT as they amend certain articles of the VAT Directive. The proposed VAT changes are the following:
- All VAT will be collected by marketplaces at check out even in those cases where the consignment has an intrinsic value above 150 €.
- The EUR 150 threshold, which currently limits the application of IOSS will be deleted. Thus, IOSS could be used even if the intrinsic value of the consignment is above 150 €
For achieving the above, changes are proposed to articles 14a, 369l and 369y of the VAT Directive
If approved, the provisions shall apply from 1 March 2028.
The communication from the EC can be found here.
The above information was kindly provided by Fernando Matesanz, IVA Board member.