Withdrawal of €22 low value consignment exemption and new IOSS return success; 8,000+ IOSS registrations; Council backs VAT in the Digital Age further reforms
The European Commission has confirmed that EU member states have collected €1.9 billion between July and December 2021, the first six months’ operation of the Import One-Stop Shop (IOSS) returns and withdrawal of the €22 VAT exemption on low value consignments. This was part of the 1 July 2021 EU e-commerce package reforms. The withdrawal of the €22 exemption accounts for €690 million of the new revenues in the first six months.
This implies €3.8 billion annual run rate.
Update: the EU is proposing the €150 threshold for use of IOSS be withdrawn from 1 March 2028.
The EC says that around 8,000 sellers and deemed supplier marketplaces have registered with the IOSS scheme so far. This new pan-EU B2C import sales reporting regime covers 94% of all eligible transactions.
This does not include further revenues from the withdrawal of the distance selling thresholds and introduction of OSS returns for distance selling within the EU, plus the marketplace deemed supplier obligations. This means this revenue haul will rise substantially as the estimates become available.
Council of the European Union back further reforms
On the back of this success, the EU Council has backed further reforms being put forward by the EC, including:
- Single EU VAT registration, extending OSS to all B2C goods movements and services plus harmonisation of the use of the reverse charge on B2B goods and services;
- Make the IOSS mandatory for all relevant transactions, and removal of the €150 threshold – this would require close consultation with Customs;
- Review harmonisation of the obligations to appoint Intermediaries for the different schemes;
- Broader measures within the VAT in the Digital Age reforms, including e-invoicing and platform economy
EU VAT in the Digital Age reforms
| EU VAT in the Digital Age | |
| 3 reforms to improve efficiency of VAT for all and reduce fraud | |
| 1. Single VAT registration in the EU; extension of OSS to B2C own stock movements | 2025 (?): Following the 1 July 2021 introduction of the One Stop-Shop (OSS), extended to cover movement of own stocks prior to cross-border B2C to reduce the foreign, non-resident VAT registrations & returns. Plus to movements of own stock with ending of 'call-off' stock burden |
| More details on Single VAT Registration in the EU | |
| Marketplaces deemed supplier for EU sellers | |
| EU IOSS mandated for marketplaces | |
| EU tackles misuse of IOSS numbers | |
| Quick fixes to existing e-commerce VAT rules | |
| Call-off stock VAT simplification ends | |
| Harmonisation of B2B Reverse Charge rules | |
| 2. Digital Reporting Requirements; e-invoicing | 2030 (?): Mandatory digital reporting of intra-community transactions; obligation to be able to issue and receive intra-community e-invoices; member states free to impose own e-invoicing or real-time reporting but most conform to EU e-invoice standard EN 16931 |
| Read more about EU Digital Reporting Requirements (DRR) | |
| E-invoices mandated intra-community supplies 2028 | |
| EC Sales lists replaced by Digital Reporting Requirements | |
| 2014 EU legal permissions for e-invoicing lifted | |
| 3. VAT treatment of the platform economy | 2026 (?): Travel & accommodation sharing platforms to become deemed supplier / liable to users' VAT. New definitions of the roles of providers, users and platforms to avoid double and no-taxation |
| Read more - Travel & accommodation platforms deemed suppliers for EU VAT | |
