The European Union has formally adopted new Value Added Tax (VAT) rules for imported goods, set to take effect on July 1, 2028.
Under these revised regulations, non-EU sellers and online platforms will be responsible for collecting and remitting VAT in the EU member state where the goods are delivered. This change shifts the VAT liability from consumers to sellers, aiming to enhance tax compliance and simplify the VAT collection process for cross-border e-commerce .
To facilitate this transition, the EU is promoting the use of the Import One-Stop Shop (IOSS), a streamlined VAT registration and payment system. The IOSS allows businesses to register in a single EU member state while selling goods across the bloc, enabling VAT to be collected at the point of sale rather than at the border. This approach not only simplifies compliance for sellers but also ensures more consistent VAT collection and improved revenue protection for member states .
The directive amends the original VAT Directive 2006/112/EC and will be published in the Official Journal of the EU, entering into force 20 days later. The implementation of these new rules is expected to modernise the EU VAT system, making it more efficient and less susceptible to fraud, particularly in the context of distance sales of imported goods .
For non-EU sellers and platforms, these changes represent a significant shift in VAT obligations, underscoring the importance of understanding and adapting to the new compliance requirements ahead of the 2028 implementation date.
