- Introduction of ViDA: The ViDA (VAT in the Digital Age) proposal, introduced by the European Commission in December 2022, aims to modernize the EU VAT system by leveraging technology to combat fraud and simplify compliance for businesses operating across Europe.
- Key Objectives: ViDA focuses on harmonizing tax policies among EU Member States to prevent evasion, promoting cooperation for fair tax contributions, and adapting VAT reporting obligations to meet the challenges posed by the digital economy.
- Three Pillars of ViDA: The proposal consists of three main pillars: (1) Real-time digital reporting via e-invoicing, (2) Deemed supplier rules for platforms in transport and accommodation, and (3) A single VAT registration process to streamline VAT registrations for businesses selling to EU consumers.
- Implementation Timeline: The implementation of ViDA will occur in phases: Pillars 2 and 3 are expected to be implemented by July 2027, real-time digital reporting by July 2030, and harmonization for existing systems by January 2035.
- Domestic Digital Reporting Flexibility: Member States will be able to implement domestic digital reporting requirements without seeking derogation once ViDA is finalized, facilitating the alignment of national mandates with EU objectives and improving compliance across the board.
Source Taxbackinternational
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