BDO Indirect Tax News

European Union - Still no agreement on VAT in the Digital Age proposals

The Minister of the 27 EU member states again failed to reach unanimous agreement on the VAT in the Digital Age (ViDA) proposals during the 21 June 2024 meeting of the Economic and Financial Affairs Council (ECOFIN) after Estonia refused to sign on to the ViDA initiative due to its objections to the “deemed supplier” rule under the platform economy measures. Agreement on the proposals was thwarted at the 14 May ECOFIN meeting for the same reason after an updated ViDA proposal was published on 8 May.

The ViDA proposals, first announced by the European Commission in 2022, aim to bring about fundamental changes to the EU VAT rules, specifically to modernise the VAT reporting obligations, tackle VAT fraud, support businesses and promote digitalisation (for prior coverage, see the article in the January 2023 issue of Indirect Tax News). ViDA is comprised of three main measures:
  • Introduction of common and standardised digital reporting and e-invoicing requirements for intra-Community transactions;
  • Updated VAT rules for the platform economy; and
  • Expansion of the scope of single VAT registration.
The inability of the ministers to reach agreement on the proposed changes is a disappointment for the Belgian presidency, which ends on 30 June. It likely will now be up to the Hungarian presidency, which starts on 1 July, to try to move the discussions forward with a view to reaching a compromise agreement that is acceptable to all 27 member states.

Susan Lyons
BDO Global
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