Are EU VAT rules for e-commerce sellers about to change? 

If you store and import goods from a non-EU country to EU-based customers, you’ll be aware that the IOSS has a threshold of €150 for the value of distance (or online) sold goods. 

In May 2023, the European Commission proposed to take this threshold away and expand the IOSS. On Tuesday 23 July 2024, they issued a briefing detailing their full proposal. Find out more about how this could affect you. 

Why has this proposal happened? 

The distance sales of imported goods valued above €150 can’t be declared in the IOSS, which the Commission has deemed a ‘burden’ for businesses. This is why they’ve proposed to make this change. 

E-commerce has grown rapidly in Europe, with 75% of internet users ordering goods and services online (up from 55% in 2012), and the market projected to pass the €899 billion mark and break €1 trillion by the middle of this decade. 

As this market continues to grow, it’s important for sellers and customers that transactions go smoothly and are fraud-proof – particularly VAT fraud-proof. 

The EU VAT rules have had to modernise to keep up with this. They were given a major reform in 2021, and so simplifications such as the One-Stop Shop (OSS) and Import One-Stop Shop (IOSS) schemes were introduced.  

Who’s impacted by this change to the IOSS, and why? 

The Commission’s proposal focuses mostly on e-commerce sales from ‘third countries’ – any country outside the EU. That’s because around 20% of EU-based online shoppers bought goods from third country sellers, transactions estimated to be worth around €29 billion. 

How would taking away the €150 IOSS threshold help your business? 

Dropping the threshold and expanding the IOSS could mean more businesses can use the scheme, which could lower your compliance costs. 

When will this proposed expansion of the IOSS happen? 

Negotiations are ongoing, and any changes are expected to come into effect by 1 March 2028.  Read the briefing for the full details, where the Commission takes a deeper dive into what the changes are and what they mean.  

Do you need to register for IOSS? 

Registering for the IOSS or OSS is optional, but if you’re importing into multiple countries in the EU, it’s a cheaper and more efficient way to stay VAT compliant.  The e-commerce landscape is constantly changing – and AVASK can help you navigate those changes so you can keep selling.