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Proposal for a Reform of the EU Customs Union

By May 24, 2023No Comments

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.