Members' Research Service By / June 14, 2023

Proposal for a simplification of VAT rules for e-commerce (imports) [EU Legislation in Progress]

The importance of a well-functioning and fraud-proof VAT system for public budgets cannot be understated.

© pikselstock / Adobe Stock

Written by Pieter Baert (1st edition).

The rise of e-commerce has required the system of value-added tax (VAT) to adapt and ensure that the rules allow for a smooth and fraud-proof transaction between customer and seller. 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 by a customer established in the EU with the goods dispatched from a third country) 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 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.


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
Rapporteur:To be appointed2023/0158(CNS)
Shadow rapporteurs:Consultation procedure
(CNS) – Parliament
adopts a non-binding opinion.
Appointment of rapporteur

Origin of seller: Non-EU (% of individuals who purchased online in 2022*)
Origin of seller: Non-EU (% of individuals who purchased online in 2022*)

Related Articles

Be the first to write a comment.

Leave a Reply