Electronic commerce and VAT: European measures for a global framework
The taxation of electronic commerce is evolving in depth. Between the European VAT reform and the global agreement on e-commerce, importers and exporters selling via marketplaces must prepare for future rules: VAT collected at source, elimination of franchises and accountability of platforms.
On 15 May, the European Commission published in the Official Journal of the EU its Decision 2025/915 confirming its support for Agreement on Electronic Commerce (World Trade Organization). The agreement should strengthen the rules-based multilateral trading system and establish the first set of global basic rules on electronic commerce, thus supporting a more stable economic environment to adapt to the growth of digital commerce.
With 4.6 billion packages imported into the EU and declared for customs as low value shipments (i.e. less than 150 euros) in 2024, problems of non-compliance, product safety and unfair competition are increasing considerably.
The text of the Global Agreement on Electronic Commerce, approved by the EU in July 2024, provides a common framework with three main areas:
- Transparency with the digitisation of customs procedures and the fight against tax fraud
- Accountability of digital intermediaries (marketplaces) in relation to VAT management obligations in destination countries
- Simplification of different cross-border tax approaches to avoid circumvention
On the other hand, the EU has already made good progress on the subject with the reform of the treatment of low value shipments planned for 2028. In terms of customs and tax treatment, this reform addresses:
- Removal of duty-free thresholds: Community taxation (customs duties) will align with VAT rules (taxation at the first euro)
- The obligation for platforms to collect VAT on processed packages (supplier name) « Deemed »)
- Strengthening controls
On 14 May, the EU Finance Ministers reached an agreement on the taxation of distance sales of imported goods by simplifying the reporting and payment of VAT in a uniform manner. For example, they encourage suppliers of goods to register on the IOSS (Import OneShop).
As a reminder, in France, the OSS system allows companies to declare and pay VAT due in other EU countries in one declaration from their professional area. This avoids the obligation to register for VAT in each Member State where they sell to final consumers.
This method allows companies not to multiply VAT registrations in different countries, but it is still optional.
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