EU to Enforce VAT Responsibility on Imported Goods: What Amazon, Temu, and AliExpress Sellers Must Know

The European Union is tightening its grip on VAT compliance for imported goods, targeting online marketplaces like Amazon, Temu, and AliExpress. In a significant step toward modernizing customs and closing tax gaps, the EU Council unanimously approved new regulations that will shift VAT responsibility directly to suppliers and platforms selling to EU consumers.

While the proposal now heads to the European Parliament for review, this step is purely consultative since taxation remains the exclusive competence of EU member states. The regulation is expected to be adopted soon and could reshape how e-commerce shipments enter the European market.

One-Stop Shop: The New Gateway for Import VAT Compliance

The One-Stop Shop (OSS) for imports is at the heart of the reform. It will become the default channel for declaring and paying VAT on goods imported into the EU. Sellers will only need to register in one EU country, even when selling across all 27 member states, drastically simplifying administrative burdens.

“Today we have taken another step forward with the introduction of the one-stop shop for imports, which makes it impossible de facto not to use the system,” said Wopke Hoekstra, EU Commissioner for Taxation.

Failure to use the OSS will not incur legal penalties. Still, Hoekstra emphasized that non-compliance will mean severe delivery delays, possibly lasting days or even weeks, making such sellers less competitive in the eyes of EU consumers.

“If you don’t use this new channel, your parcels will be set aside… which would make it very unattractive from the consumer’s point of view,” he added.

Customs Reform: No More €150 Threshold or Duty Exemptions

The VAT overhaul is part of a broader customs reform plan proposed in 2023. Among the key changes:

• The removal of the €150 threshold is currently required to use the OSS for low-value goods.
  
• Abolition of the duty exemption for parcels valued below €150, which has been widely exploited.
  

These changes aim to reduce VAT fraud and level the playing field between EU and non-EU sellers. About 4 billion parcels under €150 each year are shipped into the EU, primarily from third countries like China. The EU estimates it loses €80 billion annually due to VAT evasion.

Implications for E-Commerce Sellers and Platforms

Online platforms and international sellers must prepare for the upcoming shift:

• Mandatory OSS registration will become the de facto route for hassle-free delivery.
  
• Delays in customs processing for those who don't comply could severely damage customer satisfaction and retention.
  
• Loss of low-value exemptions may lead to revised pricing strategies.
  

This reform marks a significant milestone in the EU’s effort to create a fairer, more efficient digital economy, ensuring that foreign sellers contribute equitably to tax revenues.

Key Takeaways for Businesses:

• Who is affected? All non-EU sellers and platforms importing into the EU.
  
• What changes? VAT liability shifts to sellers/platforms; OSS becomes the central compliance hub.
  
• When? Upon formal adoption by the EU Council, expected soon.
  
• Why does it matter? Simplified processes for compliant sellers; delays and lost competitiveness for non-compliant ones.
  

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