European Parliament proposes to simplify import VAT rules for e-commerce distance sales

1 August 2024

In July 2024, the European Parliament published a briefing on the proposal to simplify VAT rules for e-commerce (imports).

The proposal follows the significant overhaul of VAT rules for e-commerce, which saw the introduction of the Import One-Stop-Shop in 2021, and is being introduced to simplify the VAT system which will hopefully lead to an increase in VAT revenue collection for the EU.
 
The briefing includes proposals to:

• Remove the EUR 150 IOSS threshold – This would mean the IOSS could be used for all imported goods regardless of value.
• Extension of the deemed supplier rule when using IOSS – The removal of the EUR 150 IOSS threshold would lead to marketplaces being responsible for VAT on all sales of imported goods made by non-EU traders using their electronic interfaces.

Some of these changes were also proposed by the European Commission via its VAT in the Digital Age reforms; but these have been removed and are now incorporated in the 2028 Customs Union reforms, which also include the proposal for removing the €150 customs duty exemption threshold.