New rules aim to curb duty evasion and boost compliance via one-stop system.
The Council of the European Union has agreed a general approach to new VAT rules designed to simplify tax collection for distance sales of imported goods into the EU. The move aims to close loopholes in the current system that have enabled widespread duty avoidance, particularly through low-value shipments sold via online marketplaces.
The proposed directive would make suppliers or online platforms liable for import VAT in the member state where the goods are delivered, rather than at the point of entry. This marks a shift from the current model, which often allows non-EU traders to underdeclare the value of goods or falsely categorise items as gifts to avoid customs duties and VAT. The changes are expected to drive greater use of the Import One-Stop Shop (IOSS), a scheme introduced in July 2021 to allow sellers to register in a single member state to declare and pay VAT for all cross-border sales to EU consumers.
Polish Finance Minister Andrzej Domanski, speaking on behalf of the current EU Council presidency, said: “VAT collection on imports through the import one-stop-shop is beneficial to the member states’ public purse and will clear the path for the ongoing negotiations on the Union Customs Code reform, which is a key priority for our presidency.”
The proposed reform comes amid mounting concern over the volume of non-compliant goods entering the EU via e-commerce channels. In the office imaging sector, for example, toner and ink cartridges are frequently misdeclared or falsely labelled to avoid customs scrutiny. These products often lack CE marking, do not comply with REACH regulations, and are not registered under WEEE legislation, shifting disposal costs onto EU-based operators. Some carry bogus certifications or use expired compliance logos to mislead consumers and authorities.
Industry associations such as ETIRA (European Toner & Inkjet Remanufacturers Association) have repeatedly called for tighter enforcement of customs and environmental compliance rules, and for a level playing field for compliant European businesses. ETIRA has highlighted that unchecked imports of non-compliant printing consumables—often misdeclared or falsely labelled—result in widespread tax fraud, evasion of recycling obligations, and improper landfill disposal. The association estimates the total cost to EU economies runs into hundreds of millions of euros annually.
Under the new directive, the IOSS would play a central role in ensuring VAT is paid upfront at the point of purchase, improving traceability and reducing the administrative burden on customs authorities. However, the Council has yet to agree on scrapping the €150 customs exemption threshold, which has long been seen as a loophole used to bypass VAT collection.
The directive now moves to the next stage, requiring unanimous approval by all 27 EU member states and consultation with the European Parliament. If adopted, the rules will be published in the Official Journal of the European Union and implemented within a set transition period.
The reform is part of a broader customs overhaul launched by the European Commission in May 2023. It aims to modernise the Union Customs Code, strengthen import controls and support digital tools such as the Digital Product Passport to improve compliance, particularly in sectors vulnerable to fraudulent imports.
