The European Union just made a move that could radically change how online sellers operate across the continent. As of March 11, 2025, the EU Council published Directive (UE) 2025/516, which modifies EU VAT rules to adapt to the digital age. Although it won’t come into effect until 2028, the content is already making waves.
So, what does this mean for online sellers using marketplaces like Amazon or running their own online stores with shipments to various EU countries? Until now, if a seller stored products in an EU country different from their own, they had to register for VAT in that country after the first sale. This meant handling local tax registrations, complying with country-specific regulations, and maintaining constant administrative oversight. In short, it was a complex and costly fiscal and administrative burden.
The new directive introduces a key concept: the Single VAT Registration. Instead of registering separately in each country where you store stock or deliver to consumers, you can declare all your intra-community operations from your country of origin through the expanded One-Stop Shop system. In simple terms, you might be able to store stock in different EU countries without needing to open a tax registration in each one. Everything will be managed from a single, centralized point.
What does this mean for online sellers? For starters, lower fiscal costs: you’ll save on accounting, tax representation, and record-keeping expenses in multiple countries. There will be less bureaucracy, with a single, centralized VAT declaration that’s easier to manage from your own country. And, you’ll have more logistical freedom to distribute stock strategically across the EU, improving delivery times and competing with larger players.
In the ever-changing world of ecommerce, staying on top of tax and accounting regulations is not just important – it’s strategic. At Creafin, a specialized tax and accounting consultancy for digital businesses, we keep up with every regulatory change so our clients can focus on selling more and growing with security and efficiency. This new directive is a clear example of how adapting on time can make all the difference competitively.
Key Takeaways
- Single VAT Registration simplifies tax declarations for online sellers across the EU
- Lower fiscal costs and less bureaucracy for sellers
- More logistical freedom to distribute stock and improve delivery times
- Staying on top of regulatory changes is crucial for ecommerce businesses to remain competitive
What’s Next
The new directive is set to come into effect in 2028, giving online sellers time to prepare and adapt to the changes. As the EU continues to evolve its tax and accounting regulations, it’s essential for businesses to stay informed and adjust their strategies accordingly. By doing so, they can remain competitive, streamline their operations, and focus on growth and expansion.