European Union: European Union finance ministers reached agreement on approach to VAT for e-commerce imports and distance sales

On 14 May 2025, European Union finance ministers reached an agreement on a new approach to Value Added Tax (VAT) for e-commerce imports and the taxation of distance sales of imported goods. The agreement would introduce changes to the Import One-Stop Shop (IOSS) aimed at modifying VAT declaration and payment procedures, adjusting administrative requirements for importers, and altering mechanisms related to VAT non-compliance. The changes would expand the scope of suppliers responsible for paying import VAT on goods valued up to EUR 150, with the objective of increasing IOSS usage. Suppliers who do not use the IOSS could be required to register for VAT in multiple member states. In cases where a supplier does not comply, member states could allow the customer to pay the VAT directly in order for the goods to be released and delivered. The changes would apply to cross-border e-commerce transactions and would form part of an ongoing process related to VAT collection and customs procedures within the EU.