During May 2025, the Economic and Financial Affairs Council (ECOFIN) agreed a draft directive relating to the VAT rules for distance sales of imported goods and import VAT. It is hoped this new directive will encourage the use of the import one-stop-shop (IOSS).
The IOSS is an electronic portal which allows suppliers to declare and remit VAT on the sales of low value imported goods, up to a value of €150, when goods are located outside the EU at the time of sale and dispatched to EU consumers.
To prevent VAT loss and encourage the use of the IOSS, the new rules will switch the obligation for paying import VAT from the consumer to the seller (or the online marketplace if they are facilitating the sale). This means that if the seller chooses not to use the IOSS they will have to have VAT registrations in each EU member state of sale.
The directive also states that if the seller does not fulfil its obligation, then the customers receiving the goods can still be made responsible for the payment of the import VAT, and that each EU member state will be able to set their own requirements for how this option is implemented.
European Parliament will now be consulted on the draft directive and will be asked to deliver their opinion. Once their opinion is received the text will then be formally adopted by the Council before being published in the EU’s Official Journal and entering into force likely from 1 July 2028.
The above news was kindly provided by Fiscal Solutions (UK), www.fiscalsolutions.co.uk; contact: [email protected].
