![Proposal for a simplification of VAT rules for e-commerce (imports) [EU Legislation in Progress]](https://i0.wp.com/epthinktank.eu/wp-content/uploads/2023/06/EPRS-Briefing-749778-Simplification-VAT-e-commerce-FINAL.png?fit=1000%2C666&ssl=1)
Written by Pieter Baert (3rd edition, updated on 23.07.2024).
The rise of e-commerce has required changes to the system of value-added tax (VAT) to ensure that the rules allow for smooth and fraud-proof transactions between customers and sellers. The major overhaul of the VAT rules for e-commerce in 2021 introduced a series of important simplifications for businesses, such as the creation of an import one-stop shop (IOSS). The IOSS allows businesses to declare and remit VAT on all their business-to-consumer (B2C) distance sales of imported goods across the EU (i.e. goods bought online and dispatched/transported from a third country to a customer in the EU) through one single VAT return, rather than in each country where they make a sale. However, at the moment, the IOSS operates with a threshold, whereby the distance-selling of imported goods with a value above €150 cannot be declared in the IOSS.
Having assessed that the €150 threshold constitutes a burden to businesses, the Commission proposed on 17 May 2023 to further expand the IOSS by removing the threshold entirely. This change would open the use of the IOSS to a wider range of businesses, which would benefit from lower compliance costs. The proposal is subject to a special legislative procedure, requiring unanimous support in the Council, following consultation of the European Parliament and the European Economic and Social Committee. Negotiations in the Council are on-going.
Versions
- July 2024: Proposal for a simplification of VAT rules for e-commerce (imports) (3rd edition)
| Proposal amending Directive 2006/112/EC as regards VAT rules relating to taxable persons who facilitate distance sales of imported goods and the application of the special scheme for distance sales of goods imported from third territories or third countries and special arrangements for declaration and payment of import VAT |
| Committee responsible: | Economic and monetary affairs (ECON) | COM(2022) 262 17.5.2023 |
| Rapporteur: | Olivier Chastel (Renew, Belgium) | 2023/0158(CNS) |
| Shadow rapporteurs: | Lídia Pereira (EPP, Portugal) Aurore Lalucq (S&D, France) Mikuláš Peksa (Greens/EFA, Czechia) Andżelika Anna Możdżanowska (ECR, Poland) Chris Macmanus (The Left, Ireland) | Consultation procedure (CNS) – Parliament adopts a non-binding opinion. |
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