BDO Indirect Tax News

The EU’s VAT in the Digital Age (ViDA) initiative introduces single VAT registration (SVR) to reduce the need for businesses to register for VAT in multiple EU member states. As from 1 July 2028, businesses may use a single, centralised VAT registration for most cross-border supplies. The Dutch government recently clarified its intended approach to the implementation of SVR by submitting a legislative proposal to the House of Representatives. This article summarises the proposal and outlines steps taxpayers can take to prepare.

What SVR Entails

Under the SVR, a business owner will generally need to register for VAT only once—in the member state of establishment. By expanding existing schemes, VAT obligations in other EU member states can be fulfilled without requiring local VAT registration. In addition, a new scheme relating to the transfer of own goods will be introduced.

The SVR has three key components:

1. Extension of the One Stop Shop (OSS): A broad range of transactions can be reported through a single central VAT return in the member state of establishment.
2. Extension of the mandatory VAT reverse charge mechanism: For cross‑border B2B supplies of goods and services, VAT liability will more frequently shift to the customer.
3. A new transfer of own goods scheme: Movements of own goods within the EU will no longer automatically trigger local VAT registration.

Despite these simplifications, certain situations will still require multiple VAT registrations (e.g., intra‑Community supplies made from a member state other than the member state of establishment).

Dutch Implementation of the SVR

Because the SVR leaves limited room for national policy choices, the legislative proposal contains few surprises. Key elements include the following:

• Extension of the reverse charge mechanism: A notable feature of the proposal is that the new mandatory reverse charge mechanism will be introduced as a separate scheme, operating alongside the existing reverse charge rules. This dual structure may create uncertainty, as some supplies could fall under both schemes. Only supplies falling within the scope of the extended mandatory reverse charge must be reported in the EC Sales List. The draft legislation addresses this fact by referencing the VAT directive, but it is our view that this creates a complex interaction between national law and EU rules. Taxable persons will need to assess carefully which scheme applies and which reporting obligations ensue.
• Amendment of the simplified triangulation scheme: A positive development is the alignment of the simplified triangulation scheme with the VAT directive. This scheme applies to intra‑Community transactions involving three parties established in three different EU member states and prevents party B from needing to register in the member state of party A or party C. Currently, where the Netherlands is the member state of arrival, party C must be established in the Netherlands—VAT registration alone is insufficient. This requirement will be eliminated under the proposal, so that as from 1 July 2028, VAT registration will be enough.
• Simplification of the small business exception in e-commerce: Another welcome change is the simplification of the small business exception in e‑commerce. This exception applies to cross‑border supplies of goods to private individuals within the EU—primarily by web shops—as well as telecommunications, broadcasting and electronic services supplied to private individuals in another member state. Where a taxable person is established in one member state, the first EUR 10,000 of such supplies is taxed in that member state. Once the threshold is exceeded, VAT becomes due in the customer’s member state. Taxable persons that do not wish to apply the exception currently must notify the tax authorities. Because the threshold applies to all taxable persons, not only small businesses, start-ups expecting high volumes must also submit such a notification. As from 1 January 2027, it will be sufficient for the choice not to apply the exception to be reflected in the taxable person’s records.

BDO Takeaway

Although the main SVR changes will not take effect until 1 July 2028, early preparation is essential. Taxable persons should begin to:

• Map their VAT positions and registrations across the EU, including goods flows and cross‑border supplies of services.
• Assess which transactions may be reportable via the one-stop shop or may fall under the extended reverse charge or the new transfer of own goods scheme.
• Review systems and processes to make sure they are future‑proof, particularly in light of upcoming e‑invoicing and digital reporting requirements.

Hendy van Hoof
Madeleine Merkx
Marco Beerens
BDO in Netherlands