Press release
EU finance ministers reached on June 13, 2025 a significant agreement on a new approach to the Value Added Tax (VAT) focusing on e-commerce imports and the taxation of distance sales of imported goods. This agreement will further enhance the effectiveness of the Import One-Stop Shop (IOSS) by simplifying VAT declaration and payment, reducing administrative burdens for EU importers, and further improving the fight against VAT fraud.
By incentivising wider adoption of IOSS, the EU intends to simplify the processing of small packages and ensure VAT payments are consistently collected on online sales to EU consumers. Under the new rules, a wider number of suppliers selling goods worth up to €150 will be responsible for paying import VAT, and therefore be encouraged to use IOSS.
While using IOSS remains voluntary, suppliers who choose not to participate face the risk of complicated and costly multiple VAT registrations across EU member states. In cases where a supplier fails to comply, a fallback procedure allows member states to permit the customer to pay the VAT directly in order to release and deliver the goods. By reinforcing the use of IOSS, the new directive streamlines the VAT process for imports and marks a significant step towards broader customs reforms, ensuring a more efficient and compliant trading environment across the European Union.
In 2024, an estimated 4.6 billion packages entered the EU from non-EU countries, equating to approximately 12 million parcels per day. In 2023, VAT declarations through the IOSS system reached over €26.3 billion, marking a 35% year-on-year increase.
For more information, see dedicated information on the Customs Reform, VAT One Stop Shop and the Communication on e-Commerce.
Other Sources
- Directive Agreement Reached: The Council has agreed on a general approach to a directive aimed at simplifying VAT collection for distance sales of imported goods. This directive intends to make suppliers responsible for VAT paid on imports, thereby promoting the use of the Import One-Stop-Shop (IOSS) system.
- Benefits of the IOSS: By making foreign traders and platforms liable for VAT on imported goods in the destination member state, the IOSS simplifies VAT declaration and payment, allowing registration in just one EU country. This upfront VAT payment mechanism enhances compliance and protects member states’ tax revenues, shifting the VAT collection burden from consumers to platforms.
- Next Steps for Implementation: The directive requires unanimous agreement within the Council and will involve consultation with the European Parliament. Following approval, it will be formally adopted and published in the EU’s Official Journal before coming into effect, as part of broader negotiations on customs reform.
Source consilium.europa.eu
- Ecofin Council’s Provisional Position: On May 13, 2025, the Ecofin Council adopted a provisional position on a proposed directive aimed at establishing VAT rules for distance sales of imported goods and import VAT as part of the Customs Union reform package.
- Responsibility for Import VAT: The directive proposal shifts the responsibility for import VAT collection to suppliers upon importation, incentivizing them to utilize the Import One Stop Shop (IOSS) for their VAT obligations.
- Abolition of the €150 Threshold: A significant change in the proposal is the elimination of the €150 threshold, allowing the IOSS to apply to all sales of imported goods to consumers in the EU, regardless of their value.
Source Taxlive
