EU to Make Suppliers Liable for Import VAT
The Council of the European Union on May 13 reached an agreement that it said would improve the collection of value-added taxes "by making suppliers liable for the VAT paid on imports." The change will "likely" encourage foreign traders or platforms to use the "VAT import one-stop-shop," which is the EU's point of contact for importers of goods from third countries into the EU.
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The directive said foreign traders "will be made liable for import VAT and VAT on the distance sales of imported goods in the member state of the final destination of the goods." Foreign traders or platforms that don't use the one-stop-shop "will need to be registered in each member state," the commission said.
"As the [import one-stop-shop] enables VAT payments up front (when the consumer purchases the item) rather than at the border, it protects member states’ tax revenues and increases VAT compliance for imports," the commission said. "It also shifts the burden for VAT collection from customers to platforms, something which the Council hopes to achieve for customs duties in its Union Customs Code reform."
The agreement will be reviewed by the European Parliament and will require formal approval by EU ministers before it can be adopted.