Expanding into the EU? Here’s How ViDA and IOSS Will Affect Your VAT Obligations

8 Jul

If your business sells goods to EU customers from outside the Union, major VAT changes are coming your way. The EU’s VAT in the Digital Age (ViDA) reforms and updates to the Import One-Stop Shop (IOSS) regime will significantly affect how you handle compliance.

ViDA Reforms: Major VAT Overhaul by 2028

From 1 July 2028, the EU will abolish the special VAT arrangement for low-value consignments. Going forward:

VAT must be charged and collected at the point of sale, not at import.
This aligns with the EU's aim to ensure fair competition between EU and non-EU sellers.

IOSS: Optional Now, Mandatory Soon

The IOSS scheme, currently optional for consignments valued under €150, allows non-EU sellers to simplify VAT reporting by registering in just one EU country.

However, from 2028:

IOSS becomes mandatory for sellers using the special scheme.
Sellers not using IOSS must register separately in each EU member state where goods are delivered — a significant administrative burden.

Tax Representatives & Shared VAT Liability

Non-EU businesses from “non-cooperative” jurisdictions must appoint an EU-established tax representative to access IOSS.

In addition, new joint and several liability rules mean:

Customs agents and intermediaries may now be held responsible for unpaid VAT.
This places greater pressure on all parties in the supply chain to ensure full compliance.

DAC7: Platform Accountability and Data Reporting

Since 2023, platforms such as Amazon, eBay, and Airbnb must comply with DAC7 rules, which require:

Reporting of seller identity, tax residence, and income to EU tax authorities.
Matching declared sales with import data, increasing scrutiny on digital traders.
Platforms may be held liable for seller non-compliance, prompting tighter onboarding and monitoring practices.

How 4 Eyes Ltd Can Help

At 4 Eyes Ltd, we specialise in EU and UK VAT compliance, helping international sellers navigate complex cross-border rules. Whether you need support with IOSS registration, appointing an EU tax representative, or understanding your platform obligations under DAC7, we can assist.

Get in touch today to ensure your VAT strategy is future-ready.

Phillip Henwood