European Union: European Commission submitted proposal for a Council Directive amending VAT rules for distance sales of imported goods

On 17 May 2023, the European Commission submitted a proposal for a Council Directive amending Directive 2006/112/EC concerning VAT rules for taxable persons facilitating distance sales of imported goods. The proposal extends the ‘deemed supplier’ regime by removing the EUR 150 threshold, making online platforms responsible for collecting and remitting VAT on all distance sales of imported goods, regardless of value. It also expands the scope of the Import One-Stop Shop (IOSS) scheme and special arrangements for import VAT declaration, aiming to reduce the compliance burden and support single VAT registration within the EU. The proposed Directive changes the VAT liability from consumers to online platforms at the point of purchase.