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Data-driven approach at heart of EU’s Customs Union reform

The European Union (EU) has revealed details of a proposed major overhaul of its existing Customs Union that would be the most ambitious reform since it was established in 1968.

At the heart of the proposals is a commitment to implementing a data-driven approach to every step of the import process – including the collection of duties and taxes across the continent.

A new EU Customs Authority will be formed to manage an EU Customs Data Hub; this will become the engine room of the new setup and replace existing IT infrastructure in EU member states, saving those countries up to €2 billion per year in operating costs.

The objectives of the reformed Customs Union include:


  • Simplifying customs processes for businesses.
  • Reducing time-consuming, cumbersome customs procedures.
  • Introducing a system for properly assessing and preventing dangerous or illegal imports.


The reforms would see the abolishment of the current threshold that allows goods valued at less than €150 to be exempted from customs duty; a rule that is frequently exploited by fraudsters.

As many as 65% of such goods entering the EU are currently undervalued to ensure duties are not required on import. The new legislation would see millions of extra goods each year being subject to levies – all of which would be processed by the new digital systems.

Why has the EU proposed a reform?

Several factors have combined in recent years to place greater pressure on the existing Customs Union setup.

These include a significant increase in trade (particularly in the e-commerce sector), a growing number of checks that must be performed on goods at EU borders and various geopolitical challenges.

Customs reform: The key points

Should the proposed reform be passed into law, it will herald a new beginning in three key areas of customs. These are:

1) Streamlined processes for businesses

Under the reforms, companies that import goods into the EU will be able to record all the relevant information in the EU Customs Data Hub. This will enable authorities to enjoy a comprehensive view of supply chains and transactions.

Data uploads will be made to a single portal and businesses will only have to submit data once for multiple consignments.

2) A bird’s-eye view of imports

Real-time data will be central to the new system, giving customs authorities a bird’s-eye view of imports and supply chains without delay. Artificial intelligence will be used to predict problems before they even occur. The main driver for this is a growing desire to eradicate unsafe or illegal goods entering the UK, but another motivating factor for the EU is the chance to ensure taxes are calculated and collected correctly.

3) An enhanced role for e-commerce platforms

E-commerce platforms will have a greater role in ensuring that goods sold online into the EU are imported in accordance with customs regulations. Currently, this responsibility lies with individual consumers and carriers. Under the new rules, platforms will be required to check customs duties and VAT are paid at purchase.

What does it mean for tax?

Data is becoming more important than ever before. Both the proposed new EU Customs Authority and the EU’s flagship VAT in the Digital Age regulations are fuelled by a new reliance on clean, accurate, complete data.

Most businesses currently have flaws within their master data; from formatting issues to inconsistencies, gaps and errors. They will all be required to take steps to cleanse it and to put in place new processes to ensure ongoing accuracy from source if they are to comply with the raft of new digital regulations.

Our advice is to take those steps now to identify potential issues and rectify them so that your company is ahead of the curve when it comes to meeting new requirements relating to data and digital tax submissions.

What happens next?

The proposals are now set to be sent to the European Parliament and the Council of the European Union for sign-off; as well as to the European Economic and Social Committee for consultation.