On 13 May 2025, the Economic and Financial Affairs Council (ECOFIN) reached political agreement on a proposal that changes the rules for the levy of VAT on imports of consignments from outside the EU with an intrinsic value not exceeding EUR 150(Low Value Consignments). Under the proposed rules, suppliers and marketplaces will become liable for VAT on the import and sale of Low Value Consignments, also when the import is made on behalf of the consumer. The existing postal and courier arrangement will be abolished. The proposal aims to increase the use of the Import One Stop Shop (IOSS).
These proposed rules are intended to apply as of 1 July 2028. The European Parliament will now be consulted on the proposed changes. The proposal should thereafter be formally approved by the Council of the European Union. It is expected that this legislative process will take place in the coming months.
What are the proposed changes?
The proposed changes are summarized below:
- Suppliers and marketplaces will be liable for VAT on the import
and sale of the Low Value Consignments in the EU destination
country, unless they use the IOSS. The proposal also covers
situations where the import is made on behalf of the consumer. Not
using the IOSS will in principle result in VAT (registration)
obligations in all EU destination countries for the suppliers and
marketplaces.
If the IOSS is used, the import will be VAT exempt and VAT will be due on the sale of the goods by the (deemed) supplier in the destination country. The (deemed) supplier can declare these VAT amounts in the country of the IOSS filing (single return and payment for all EU countries).
- Suppliers and marketplaces that are established outside the EU
and that are liable for EU VAT on Low Value Consignments will in
principle be required to appoint a tax representative. Under the
current rules, non-EU (deemed) suppliers already have to appoint an
intermediary to use the IOSS.
- In situations where the IOSS is not used and the import VAT
obligations are not duly complied with, the goods will not be
released for free circulation. For such situations, the proposal
includes an option for the consumer to pay the import VAT as a
fallback option.
- The proposal enables EU countries to make customs
representatives who do not act as a tax representative and other
persons jointly and severally liable for the import VAT. This
relates, for example, to persons that are (also) liable to pay the
customs debt in case of customs irregularities.
- The existing special arrangement for customs declarants (like postal operators and carriers) that import Low Value Consignments on behalf of consumers will be abolished. This postal and courier arrangement was introduced on 1 July 2021, but does not align with the intention to shift VAT liabilities to suppliers and marketplaces.
Our thoughts
The proposed changes fit in a broader trend whereby the burden of VAT collection is shifted to tax-compliant sellers and marketplaces. This trend of increased tax obligations for marketplaces is not limited to VAT. For example, the Customs Reform proposal includes a plan to make marketplaces liable for customs duties and to abolish the current EUR 150 threshold for Low Value Consignments. We refer to our earlier website post regarding this topic.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
