- Approval and Context:
- On 5 November 2024, the EU Finance Ministers at ECOFIN approved the latest ViDA package.
- This approval came after Estonia raised concerns about platform rules, leading to compromise discussions throughout 2024.
- Significance of ViDA:
- The package aims to streamline and harmonize VAT rules across the EU, reducing administrative burdens for cross-border businesses and safeguarding tax revenues for Member States.
- It addresses the needs of the digital economy and aims to make VAT rules more apt for the modern economy and single market.
- Key Components and Dates:
- Digital Reporting Requirements (DRR) and E-invoicing:
- Electronic invoicing will become mandatory for intra-EU B2B transactions starting 1 July 2030, with a transitional date of 1 January 2035.
- Platform Economy:
- Rules for platforms facilitating short-term accommodation rentals and passenger transport will apply from 1 July 2028 (earliest) and mandatory by 1 January 2030.
- Single VAT Registration:
- From 1 July 2028, businesses operating across different EU Member States will no longer need multiple VAT registrations, and a One Stop Shop will be expanded.
- Digital Reporting Requirements (DRR) and E-invoicing:
- Details on Digital Reporting and E-invoicing:
- Electronic invoices will be the default for issuing invoices, and real-time reporting will replace current recapitulative statements for cross-border supplies.
- Member States with existing domestic digital reporting systems must align with the EU model by 1 January 2035.
- Platform Economy VAT Treatment:
- Platforms will be deemed suppliers for certain services unless the underlying provider communicates their VAT ID and declares VAT due.
- The rules provide flexibility and special schemes for small enterprises and travel agents, with long lead-in times to allow for adaptation.
Source PwC
- BREAKING: 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
- Newsletters on approval of VAT in the Digital Age
