Regulatory updates - EU

The directive aims to improve the collection of VAT on imported goods, by making suppliers responsible for VAT paid upon importation. This approach creates stronger incentives for suppliers outside the EU to start using the VAT import one-stop shop (IOSS) for VAT obligations such as reporting and collection. One significant change is the elimination of the 150 EUR threshold for IOSS, making it possible to apply IOSS to all sales of goods imported into the EU, despite their value.

The directive was published in the Official Journal of the EU on July 25, 2025 and will enter into force from August 14, 2025, with the rules becoming applicable from July 1, 2028.

On June 27, 2025, the EU Council announced its agreement on a partial negotiating mandate for a significant customs reform package. This initiative responds to increasing trade volumes, particularly in e-commerce, growing EU standards, and changing global trade dynamics. The reform aims to strengthen protection of the Single Market, improve duty collection efficiency, and enhance controls without creating excessive burdens for authorities or businesses.

Key elements of the proposed reform include:

• The creation of a new EU Customs Authority, a decentralized agency that will coordinate national customs authorities and manage risk at the EU level;
• The establishment of an EU Customs Data Hub, providing a central online platform where businesses can submit information once, while giving authorities real-time visibility of trade flows;
• Enhanced trader programs, including a new "trust and check traders" scheme for businesses offering maximum transparency, while maintaining the current Authorised Economic Operator (AEO) program with additional support for small and medium-sized enterprises;
• A modernized approach to e-commerce, with tailored rules and systems to address the sector's rapid growth and unique challenges.

Furthermore, the Council has also introduced clarifications to customs processes and proposed a new handling fee for small consignments sent to the EU through distance selling.

The Council will now begin negotiations with the European Parliament, though certain aspects of the reform, including the location of the new authority and tariff details, will be addressed at a later stage.

As of March 25, the ViDA package has now been published in the official journal of the European Union. The legislation within the package enters into force 20 days after the publication, on April 14. 

Starting April 14, 2025, Member States may begin introducing domestic e-invoicing obligations and no longer require approval from the European Commission.