The European Commission’s “VAT in the Digital Age” initiative is a response to the digitalisation of the economy and the new challenges that this poses to European tax authorities and the EU VAT system. This includes the emergence of new business models in the digital economy, as well as the increased amount of data that tax authorities are able to collect (including current and upcoming digital and e-invoicing reporting requirements and mandates). The European Commission recognises that digitalisation can create opportunities to increase compliance, reduce the VAT Gap and simplify tax compliance and reporting for businesses. This major policy initiative focuses on three topics related to VAT and evolving technologies, digitalisation and new innovative business models, namely:
- Single VAT registration
- Digital Reporting Requirements (DRR) and e-invoicing
- VAT treatment of the platform economy
Source Avalara
