The European Union introduced significant changes to its Value Added Tax (VAT) rules in July 2021, impacting U.S. businesses selling goods to EU consumers. A key element of this update is the 150 Eur threshold. Under these regulations, all goods imported into the EU with a value of up to 150 euros (approximately $178 USD) became subject to VAT. Items exceeding the 150 EUR valuation are subject to both VAT and duties.
Recently, La Poste, France’s postal service, announced further measures effective January 1st, 2022, adding complexity for online sellers. These new rules extend VAT liability to online marketplaces in several scenarios, even for goods valued below the 150 EUR threshold. Specifically, online marketplaces are now responsible for VAT in these instances:
- Business-to-consumer (B2C) sales under 150 EUR when the marketplace is not registered with the Import One-Stop Shop (IOSS) system.
- B2C flows under 150 EUR that are ineligible for IOSS, such as restricted or prohibited items and excisable goods.
- All B2C flows exceeding 150 EUR, regardless of IOSS registration.
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For U.S. sellers shipping goods to France, these changes mean that collecting VAT is now mandatory for goods valued above 150 euros. To comply with French regulations, merchants will need to obtain a French VAT identity number from the French tax authorities. This registration enables them to remit the VAT collected from their sales.
This announcement from La Poste raises important questions. Typically, EU-wide postal regulations are harmonized, and changes are implemented across all member states concurrently. Individual postal systems generally await Union-level guidance before enacting changes. Moreover, the rapid January 1st implementation date, coupled with the current lack of comprehensive instructions for online sellers, generates uncertainty about France’s readiness to enforce these changes so quickly.
GlobalPost is closely monitoring this evolving situation and will provide further updates as they become available. U.S. sellers are advised to stay informed about these new 150 EUR VAT rules to ensure compliance and avoid disruptions to their European sales.
