- E-invoicing Mandates:
- E-invoicing is being standardized across Europe, with the EU’s VAT in the Digital Age (ViDA) reforms mandating real-time digital reporting for cross-border trade by July 2030.
- Member states can mandate e-invoicing for domestic transactions without prior approval from the European Commission.
- Countries like Romania and Germany are implementing their e-invoicing mandates, with Romania requiring B2C reporting via its RO E-Factura system starting January 2025.
- Simplified VAT for Small Businesses:
- From January 1, 2025, the EU will introduce voluntary schemes for small and medium-sized enterprises (SMEs) to apply VAT exemptions for goods and services.
- Exemptions do not apply to purchases made by SMEs, and specific thresholds will determine eligibility for these schemes.
- Changes in VAT Rates:
- EU member states will have greater flexibility in applying reduced VAT rates, expanding from 21 to 29 categories.
- Slovakia will increase its standard VAT rate from 20% to 23%, while the UK will impose a 20% VAT on private school fees starting January 1, 2025.
- New Rules for Virtual Events:
- Starting January 1, 2025, VAT for virtual events will be determined based on the customer’s location, with B2C transactions subject to the consumer’s local VAT rate.
- Organizers can use the One Stop Shop (OSS) system to manage VAT collection across the EU.
- Switzerland’s New Platform Rules:
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- From January 2025, Switzerland will implement the deemed supplier model, holding e-commerce platforms responsible for VAT compliance on cross-border and domestic sales.
- Platforms facilitating sales exceeding CHF 100,000 in low-value consignments must register for Swiss VAT and will become the importer of record.
These developments signify a major shift in VAT regulations across Europe, impacting businesses’ invoicing practices, compliance obligations, and taxation of digital services.
Source Forbes
