EU plans to amend the Import One-Stop Shop

Background

Goods can often be produced much more cheaply in third countries than in the EU. If suppliers also cheat the state on VAT, this puts suppliers from the EU at an unjustified disadvantage. With the introduction of the iOSS procedure, which significantly simplifies the bureaucratic effort, suppliers from third countries should be motivated to fulfil their duties. Until now, the regulation has stipulated that suppliers who import parcels with an intrinsic value of €150 or less into an EU member state and then deliver them to a private final consumer (or certain equivalent parties) are exempt from import VAT. They can declare and pay the VAT they owe in the country of destination, under the distance selling scheme, centrally in just one EU Member State. Operators of electronic interfaces that support distance selling from third countries and therefore become fictitious suppliers can also use the iOSS procedure.

Although this bureaucratic simplification has had an effect, there is still room for improvement. For this reason, life is now to be made more difficult for companies that do not use the iOSS procedure.

Planned changes

According to the so-called general approach of the EU Council of 13 May 2025, the following will apply in future: If the supplier does not apply the iOSS procedure, the import is subject to import VAT. Unlike in the past, the supplier will be the mandatory debtor of the import EU VAT. Suppliers based in a third country require a tax representative if neither the EU nor the country of import has concluded an administrative assistance agreement with the country of residence. If the EU VAT is not paid, the customs authority will not release the parcel for free circulation, i.e. it will not be delivered to the customer. In such a case, the customer can pay the VAT himself and, if necessary, claim it back from the supplier through civil proceedings.

This general approach is not yet a valid directive; further steps are still required in the legislative process.

If the supplier uses the iOSS procedure, the import is VAT exempt as before and the VAT for the subsequent supply can be declared and paid centrally in just one EU Member State.

Outlook: Customs reform

On 17 May 2023, the EU Commission presented a proposal for a comprehensive reform of customs law. This includes the abolition of the duty-free limit of 150 €. It is to be replaced by a so-called bucket tariff as the standard, in which goods are categorised into five groups. It is possible to opt for the EU customs tariff.

Author: Nadia Schulte