Executive Summary
Council Directive (EU) 2025/1539, adopted on July 18, 2025, represents a significant update to EU VAT rules concerning distance sales of imported goods. Its primary objective is to incentivise the use of the Import One-Stop Shop (IOSS) scheme to enhance VAT compliance, prevent market distortion, and safeguard Member State tax revenues. This is largely achieved by shifting the primary liability for import VAT from the customer to the supplier or deemed supplier, particularly for low-value consignments eligible for the IOSS. The Directive introduces new obligations for non-EU established businesses, expands joint and several liability provisions, and phases out previous “special arrangements” that placed liability on the customer. Member States are required to transpose these changes into national law by June 30, 2028, with application commencing from July 1, 2028.
Key Themes and Most Important Ideas/Facts
- Primary Objective: Incentivising IOSS and Enhancing VAT Compliance
- The core aim is to “further incentivise the use of the IOSS scheme” to “facilitate and guarantee increased VAT compliance in relation to imports.” This addresses the issue of “less effective tax collection on imports of low-value consignments from third countries to consumers in the Union.”
- By making the IOSS scheme the preferred and most administratively efficient option, the Directive seeks to prevent “distortion of competition to the detriment of Union supplies.”
- Ultimately, the objective is to “advance the concept of a single VAT registration in the Union.”
- Shift in Import VAT Liability: From Customer to Supplier/Deemed Supplier
- Fundamental Change: A critical amendment is the systematic shift of liability for import VAT. “Under the new Directive, for distance sales of goods imported from third territories or third countries that would be eligible for the special scheme (IOSS), the supplier or, where applicable, the deemed supplier is primarily made liable to pay the import VAT.”
- Rationale: This reverses previous rules (e.g., Title XII, Chapter 7 of Directive 2006/112/EC, which is now deleted), which often placed liability on the customer. The deletion of Chapter 7 aligns the legal framework with the new objective of shifting responsibility.
- Incentive Mechanism: If suppliers or deemed suppliers do not use the IOSS scheme, they become liable for both import VAT and VAT on distance sales in each Member State of final destination, necessitating “registration in each of those Member States,” thereby creating a significant administrative burden and incentivising IOSS adoption.
- Mandatory Tax Representative for Non-EU Established Businesses (Non-IOSS Users)
- Obligation: “suppliers or deemed suppliers not established in the Union and not availing themselves of the use of the IOSS scheme should be obliged to appoint a tax representative assuming all VAT obligations related to all eligible import consignments.”
- Conditions for Requirement: This obligation applies if the non-EU supplier or deemed supplier is from a third country with which “neither the Union nor the Member State of importation has concluded an agreement on mutual assistance similar in scope to Council Directive 2010/24/EU and Regulation (EU) No 904/2010.”
- Alignment: The conditions for appointing a tax representative for import VAT are “aligned with the conditions governing the obligation on non-Union established suppliers or deemed suppliers to appoint an intermediary for the use of the IOSS scheme, in order to ensure a level playing field.”
- Expanded Joint and Several Liability
- Scope: Member States “may provide that a person other than the customer and the person liable for payment of VAT is to be held jointly and severally liable for payment of import VAT.”
- Target Parties: This can include “indirect customs representatives, who can be made jointly and severally liable if they do not act as tax representatives, or other persons liable for customs debt in cases of irregularities.”
- Purpose: This measure “aims to enhance enforcement and secure the payment of import VAT.”
- Customer as a Fallback Payer (New Article 201a)
- Purpose: To prevent goods from not being released for free circulation due to supplier non-compliance, Member States “may allow… the customer to pay the import VAT due by the supplier or deemed supplier, where the supplier or deemed supplier fails to fulfil the registration and payment obligations.”
- Conditions: This is a discretionary measure for Member States, who “should be allowed to establish the appropriate conditions and procedures for applying that possibility.”
- Temporary Nature/Evaluation: This provision is seen as addressing “difficulties arising from the transition from the customer’s liability to the supplier’s or deemed supplier’s liability on import consignments,” and the “Commission should assess whether maintaining those rules after the completion of the customs reform is justified.”
- Deletion of Special Arrangements (Title XII, Chapter 7)
- The existing “special arrangements” in Directive 2006/112/EC that made the “customer liable for payment of import VAT relating to eligible distance sales of imported goods” are “deleted.” This is because these provisions are “contrary to the objective of shifting the liability from the customer to the supplier or deemed supplier.”
- Implementation Timeline
- Entry into Force: The Directive entered into force on the twentieth day following its publication in the Official Journal of the European Union (publication date: July 25, 2025).
- Transposition Deadline: Member States must “adopt and publish, by 30 June 2028, the laws, regulations and administrative provisions necessary to comply with this Directive.”
- Application Date: Member States “shall apply those measures from 1 July 2028.”
- Commission Evaluation (Article 205a)
- The Commission is tasked to present an “evaluation report on the functioning of Article 201(2), (3) and (4), Article 201a, Article 204(1), fourth subparagraph, and Article 205, second paragraph” by March 31, 2032.
- This report will “assess the need of maintaining Article 201a and Article 205, second paragraph,” and propose legislative changes if necessary. This highlights the potentially transitional nature of some provisions.
This Directive underscores the EU’s commitment to modernising its VAT system for the digital age, ensuring fair competition, and protecting national tax revenues by centralising liability and encouraging simplified compliance mechanisms like IOSS.
Source eur-lex.europa.eu
The Council of the EU adopts new VAT rules for sales of imported goods
- New VAT Collection Framework: The Council of the EU adopted a directive amending VAT Directive 2006/112/EC, which shifts the responsibility for VAT on imported goods to suppliers, effective from July 1, 2028, to enhance VAT collection efficiency.
- Removal of the IOSS Threshold: The directive eliminates the €150 threshold for the Import One-Stop Shop (IOSS), allowing all imported goods, regardless of value, to be subject to the IOSS for VAT reporting and collection, incentivizing non-EU suppliers to comply.
- Timeline for Implementation: The directive was published in the Official Journal of the EU on July 25, 2025, and will enter into force on August 14, 2025, with the new rules becoming applicable from July 1, 2028.
Source Pagero
EU Directive 2025/1539: Amending VAT Rules for Remote Sales of Imported Goods
- Directive EU 2025/1539 concerns VAT rules for remote sales of imported goods
- Published on 28 July 2025
- Modifies VAT rules for tax subjects facilitating remote sales of imported goods
- Applies special arrangements for VAT declaration and payment upon import
- Aims to enhance compliance and prevent competition distortion
- Encourages use of the Import One-Stop Shop IOSS system
- Suppliers not registered in IOSS must pay VAT upon import and for remote sales in destination member states
- Non-EU suppliers not using IOSS must appoint a tax representative
Source: taxheaven.gr
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