Articles 28a, 46a, 135 (3), 136b, 172a, 242a, 306
A deemed supplier regime will be introduced in the short-term accommodation rental, and passenger transport sectors of the platform economy (Article 28a).
Under this measure, where the underlying supplier does not charge VAT because they are, for example, a natural person or they make use of the special scheme for small enterprises, the platform will charge and account for the VAT on the underlying supply.
This will ensure a level playing field between platforms offering services and other traditional suppliers qualifying as taxable persons, while not imposing a burden on the underlying suppliers operating through the platform.
The ‘deemed supplier’ model is a simplification measure intended to facilitate the collection of VAT in specific situations. This is typically the case when the intermediary in a transaction (i.e. the platform) is better placed than the underlying supplier to ensure the collection of the VAT due on this transaction. The reasons are either because it would be too burdensome for this underlying supplier to collect the VAT (e.g. when the underlying supplier is a natural person or a taxable person using special schemes for small enterprises), or because it is more secure to collect it from this intermediary (when the underlying supplier is not established in the EU). Further elements relating to the practical application of the measure are in the accompanying proposal to amend Implementing Regulation (EU) No 282/2011.
In order to prevent abuse, it has been clarified that a transaction for which a platform is the deemed supplier cannot be included in the special scheme for travel agents (Article 306). Further, clarifications to the existing VAT legislation in this area have been introduced.
Namely:
- That the facilitation service provided by a platform should be regarded as an intermediary service (Article 46a). This allows for a uniform application of the place of supply rules for the facilitation service.
- That the supply by the underlying supplier to the platform shall be VAT exempt without a deduction right (Article 136b).
- That the provision of short-term accommodation rental shall be regarded as a sector similar in nature to the hotel sector, and therefore not eligible to be exempt from VAT (Article 135). This ensures that the deemed supply from the platform to the final consumer has the same VAT treatment as the provision of services from traditional hotels to the final consumer.
- That the supply by the platform to the final customer should not impact on the deduction right of the platform for its activities (Article 172a).
- That, for supplies falling outside the deemed supplier model, the platform will be obliged to keep the records relating to both business to business (B2B) and business to consumer (B2C) supplies (Article 242a). Accompanying legislation (the proposal to amend Regulation (EU) No 904/2010) will standardise how this information is to be transmitted to the Member States. For supplies falling within the deemed supplier model, the normal VAT accounting rules will apply.
See also
- ViDA Analyzed – Part 1: E-invoicing will be the general rule for the issuance of invoices – Legal basis
- ViDA Analyzed – Part 2: 2 days deadline for the issuance of invoices on intra-Community supplies
- ViDA Analyzed – Part 3: Elimination of the possibility to issue summary invoices
- ViDA Analyzed – Part 4: Content of invoice – More data elements added to allow automation of process reporting (Art. 226)
- ViDA Analyzed – Part 5: Call-Off Simplification (Art. 17a) introduced via the Quick Fixes will cease to exist
- ViDA Analyzed – Part 6: Digital reporting system for intra-Community transactions: Articles 262 to 271
- ViDA Analyzed – Part 7: Digital reporting system for supplies of goods and services for consideration carried out within the territory of one Member State: Articles 271a to 273
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