European Union: Council of the European Union adopted Directive amending Council Directive 2006/112/EC on value added tax for e-commerce imports and distance sales

On 18 July 2025, the Council of the European Union adopted a Directive amending Council Directive 2006/112/EC to update value added tax (VAT) rules for distance sales of imported goods and the Import One Stop Shop (IOSS) scheme. Member States must transpose the changes by 30 June 2028, with application from 1 July 2028. The Directive shifts VAT liability on importation and distance sales from European Union (EU) customers to suppliers or deemed suppliers, including non-EU entities. Non-EU suppliers or platforms not using the IOSS must register for VAT or appoint a tax representative in each Member State where goods are sold, unless exempted by certain Commission Implementing Decisions or mutual assistance agreements. Member States may hold indirect customs representatives jointly and severally liable and may allow customers to pay VAT if suppliers do not comply. It repeals previous special arrangements and harmonises tax representative obligations. The European Commission (EC) will evaluate the Directive’s impact and report to the Council by 31 March 2032.