EU Council Approves VAT Directive Changes for Non-EU Distance Sales, Effective July 2028

EU Council approved changes to the EU VAT Directive on 18th July 2025
Changes are part of the EU Customs Reform Package and will be effective from 1st July 2028
Aim is to safeguard VAT collection on distance sales to EU consumers from outside the EU
Encourages use of the Import One Stop Shop (IOSS) for VAT collection on low value consignment goods
Current rules allow three options for customs clearance of low value goods entering the EU
New legislation makes suppliers or platforms responsible for VAT on goods below EUR 150
Consumers can no longer be named as importer of record for these sales
Suppliers or platforms must use IOSS or be VAT registered in the importing Member State
Non-EU suppliers may need a fiscal representative and possibly a bank guarantee
IOSS offers cost savings and simplified VAT compliance for suppliers and platforms
Financial burden of multiple VAT registrations and other costs may deter non-IOSS users

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.