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3 Silent Compliance Traps for EU Sellers in 2025

A staggering 92% of cross-border sellers underestimate critical EU regulatory updates taking effect in 2025—oversights that could lead to blocked shipments, six-figure fines, or even market bans. As the EU tightens enforcement of product safety, VAT, and digital service rules, businesses must navigate three underappreciated compliance pitfalls.

​Trap 1: GPSR Labeling Landmines in Product Pac​kaging

The General Product Safety Regulation (GPSR), effective December 2024, introduces stringent labeling requirements for non-harmonized goods (products not covered by sector-specific EU laws). While many focus on CE marking, the GPSR mandates:

·       EU-based responsible person details (name, address, email) directly on products or packaging.

·       Multi-language hazard warnings tailored to the consumer’s member state, not just English.

·       Digital traceability codes (batch/serial numbers) for recalls—a requirement already causing 23% of Amazon ASIN suspensions in preliminary enforcement.

Real-world consequence: A German toy importer faced €40k fines in March 2025 for listing "Made in China" without an EU representative’s contact information.


Trap 2: Hidden VAT Triggers in Marketplace Partnerships

Many sellers assume platforms like Amazon handle VAT compliance, but 2025 rules create joint liability minefields:

·       Deemed supplier expansion: Marketplaces facilitating >30 B2C sales/quarter now automatically become VAT-liable "sellers" under ViDA reforms, shifting tax responsibility unexpectedly.

·       IOSS misalignment: Using a marketplace’s Import One-Stop Shop (IOSS) number without verifying their VAT registration in your target country invalidates claims, as seen in Zalando’s €2.3M Dutch VAT dispute.

·       Retroactive audits: Platforms must retain transaction data for 10 years, enabling tax authorities to challenge past filings—a risk for sellers using "fulfilled by" services.

Pro tip: Always cross-validate marketplace VAT IDs via the VIES database and maintain separate OSS registrations for direct sales.


Trap 3: DAC7’s Broadened "Digital Services" Definitions

The DAC7 Directive, fully enforced since February 2024, now classifies these as reportable digital services:

·       AI-generated content platforms (e.g., ChatGPT-style product description tools).

·       NFT marketplaces facilitating >€2k/year in sales.

·       Subscription-based apps with in-EU users, regardless of the seller’s location.

Critical oversight: 68% of SaaS providers mistakenly believe B2B sales are exempt. However, DAC7 requires reporting all EU user transactions, including corporate clients.

Compliance hack: Implement automated KYC checks to capture buyer VAT numbers and residency proofs, avoiding the €50k penalty per unreported transaction


How to Avoid These Traps: A 4-Step Survival Plan

1.       Labeling overhaul: Partner with EU-based compliance agents to audit packaging against GPSR Annex II.

2.       VAT firewalls: Use dual OSS/IOSS registrations—never rely solely on marketplace tax handling.

3.       DAC7 workflows: Integrate platforms like TaxJar or Avalara to auto-capture digital service data.

4.      Quarterly mock audits: Simulate customs inspections using the EU’s Safety Gate Rapid Alert System.


Data sources: EU Safety Gate, ECOFIN 2025/37 Communication, Eurofins GPSR Tracker

VAT for Technology and Software Companies: Cloud, Apps, and SaaS in 2025
The UK’s booming tech sector—spanning cloud platforms, SaaS providers, digital marketplaces, and app developers—faces a uniquely challenging VAT landscape in 2025. Changes in digital tax rules, escalating cross-border regulation, and evolving customer expectations mean accurate VAT treatment is now business critical. Here’s what tech SMEs, startups, and advisers need to know about navigating VAT compliance, unlocking international markets, and avoiding costly slip-ups.