- ECOFIN Meeting and Agreement on ViDA Proposal: On 5 November 2024, the Economic and Financial Affairs Council (ECOFIN) held its first meeting under the Hungarian presidency and reached an agreement on the VAT in the Digital Age (ViDA) proposal, aimed at modernizing VAT systems across the EU. This agreement follows extensive discussions and requires a European Parliament consultation due to significant changes from the initial proposal published in December 2022.
- Key Components of ViDA Proposal: The ViDA proposal includes measures for digital VAT reporting, changes to VAT rules for the platform economy and e-commerce, and steps to reduce VAT compliance burdens through a single VAT registration in the EU. The measures have different application dates ranging from 2025 to 2035.
- Flexibility in Platform Economy Rules: The proposal grants member states flexibility in implementing the deemed supplier regime for platforms facilitating short-term accommodation rentals and road passenger transport. Member states can define taxable supplies, exempt small businesses, and adopt a phased implementation starting from 1 July 2028, with mandatory adoption by 1 January 2030.
- Digital Reporting Requirements (DRR): The DRR measures include mandatory e-invoicing for intra-EU supplies from 1 July 2030, with real-time reporting to national tax authorities. Domestic DRR obligations must align with EU standards by 1 July 2030, and member states can introduce mandatory e-invoicing without needing a derogation from the European Commission.
- Single VAT Registration: The single VAT registration measures allow businesses to declare cross-border transfers under a single VAT number and cover all B2C supplies, including domestic supplies. Member states must implement a domestic reverse charge mechanism for non-established suppliers by 1 July 2028. Businesses need to prepare for these changes by understanding their transactions and systems architecture to develop an implementation roadmap.
Source Deloitte
See also
- ECOFIN approved the VAT in the Digital Age (ViDA) Act – Compromise has been reached
- ViDA – Consolidated version of the EU VAT Directive 2006/112/EC once ViDA Act will be enacted
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