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VAT in the Digital Age
Learn about the European Commission’s proposals and how they will impact your business
On 8 December 2022, the European Commission published its VAT in the Digital Age (ViDA) proposal, defining the core areas where VAT in the European Union will be modernized in the coming years. Particularly, the introduction of the Digital Reporting Requirements in the European Union (EU) will have a significant impact on the intra-EU B2B trade of businesses. What can we expect between 2024 and 2028?
On this overview page we will keep you updated about all developments regarding the VAT in the Digital Age (ViDA) proposal. We will guide you through the proposed rules that will enter into force between 2024 and 2028.
Key highlights
On 8 December 2022, the European Commission published its proposals in the context of the VAT in the Digital Age (ViDA) project. The package consists of proposals for changes to the VAT Directive, the Regulation on VAT administrative cooperation and the VAT Implementing Regulation. The proposals contain a large number of detailed changes to the current VAT legislation, which should enter into force at different points in time ranging from 1 January 2024 till 1 January 2028.
Key highlights of the proposals are:
- The digital reporting requirements for intra-EU supplies of goods and services, with transactional and near real time data transmission from structured electronic invoices;
- The new liabilities for VAT collection imposed on platforms facilitating short term accommodation rental and passenger transport as well as on e-commerce marketplaces (extending the 2021 deemed supplier rule to all marketplace goods transactions);
- The creation of new and extended possibilities for business trading across borders to report their transactions through a single VAT registration in the EU.
Analysis and impact
The VAT in the Digital Age proposals are likely to have a big impact for many businesses in the Netherlands and across the European Union.
Read our alerts to explore how these proposals may impact your business:
21 December 2023: ViDA and other e-reporting and e-invoicing updates across the EU
9 October 2023: Latest e-invoicing updates in Belgium, France and Israel and our takeaways from the E-Invoicing Exchange Summit
3 August 2023: Council of the EU approves on B2B e-invoicing mandate in Romania and Germany, while France postpones implementation
6 July 2023: VAT in the Digital Age: Suggested amendments European Parliament
5 July 2023: European Commission backs plans to implement B2B e-invoicing mandate in Romania and Germany
8 December 2022: EU’s VAT in the Digital Age: what can we expect between 2024 and 2028?
The road that led to this proposal
The work done by the European Commission on VAT in the Digital Age is a key part of its action plan for fair and simple taxation supporting the recovery published in 2020. It explores further digitalization options in the indirect tax space, making tax reporting more transparent and automated and better accommodating VAT for new digital business models.
VAT in the Digital Age is a journey which the European Commission, national tax authorities and the business community are travelling together. The December 2022 proposals are a pivotal moment rather than the starting or the end point. Over the past two years, the proposals were prepared through an extensive study on the options for reform and numerous interactions, including a public consultation.
ViDA package - proposed timelines
What next?
The adoption by the European Commission brings the concrete proposed measures into the public domain and kicks off the formal legislative process for VAT in the Digital Age.
On 8 December the feedback period was opened by the European Commission for stakeholders to make their views known. This adopted act is open for feedback for a minimum period of 8 weeks. All feedback received will be summarised by the European Commission and presented to the European Parliament and Council with the aim of feeding into the legislative debate. Feedback received will be published.
To get adopted, the proposal will need to receive unanimous approval by all EU Member States, which may require further changes or additions to the proposed measures. After the adoption by the EU Council, a certain timeline will be allowed to Member States to implement the changes in their national VAT legislation. Changes may therefore only start to apply at least two or more years from now, with measures in the field of digital reporting and e-invoicing most likely subject to a phased introduction.
Plan for the future
At Deloitte, we are committed to bring you news and insights as the VAT in the Digital Age reform goes through this process, in order to help you plan and prepare for the future VAT environment.
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