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

Source: meridianglobalservices.com

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.

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