- The rapid growth of the digital platform economy has disrupted traditional business models, creating competitive distortions and a gray market. Digital platforms blend various business models, blurring the lines between service providers and consumers, posing challenges for VAT purposes.
- The current EU VAT system does not adequately address the challenges posed by these new digital business models, necessitating reforms to close tax gaps and bring clarity to VAT obligations.
- The ViDA project aims to address VAT taxation issues for services provided via digital platforms, focusing on passenger transport and short-term rental services. ViDA treats platforms as the “service provider” if the actual provider is not VAT-registered, making platforms responsible for VAT collection and remittance.
- Challenges for platform-based services remain, despite the implementation of the DAC 7 Directive. Determining the service provider remains an unresolved issue, guided by current VAT regulations and CJEU judgments. National authorities are increasingly scrutinizing digital platforms for tax compliance.
Source Taxually
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