European Parliament ’28th regime’ proposals could extend the EU Inc. corporate framework into VAT
A single VAT number, expanding One Stop Shop and centralised compliance
The European Parliament is continuing discussions on adding an optional EU tax regime to the European Commission’s new EU Inc. corporate framework.
EU Inc., sometimes described as a “28th regime”, is intended to give companies an optional common legal framework for establishing and expanding businesses across the EU rather than navigating 27 different national company law systems.
The European Parliament wants a tax regime to accompany it, picking up after the VAT in the Digital Age reforms.
Single EU VAT number and expanded One Stop Shop
For VAT, Parliament has proposed a single EU VAT identification number and digital One Stop Shop for businesses participating in the regime.
This could allow VAT declarations and potentially VAT refunds across Member States to be handled through a centralised system, reducing the need for multiple national VAT registrations and compliance processes.
The VAT proposals form part of a broader tax package that includes:
- a consolidated corporate tax base
- standardised corporate tax returns
- simplified withholding tax procedures
- greater consistency for transfer pricing and R&D incentives
The proposals are aimed particularly at businesses seeking to scale across the Single Market.
The next step after ViDA?
The VAT proposals could potentially take EU VAT simplification beyond the Single VAT Registration reforms already being introduced under VAT in the Digital Age (ViDA).
ViDA will reduce foreign VAT registrations through an expanded One Stop Shop and mandatory domestic reverse charge from July 2028.
EU Inc. raises the longer-term prospect of going further: one VAT identity and a central compliance route for businesses operating across the EU.
However, this remains at an early policy stage. The European Parliament’s tax proposals are recommendations rather than agreed legislation, and substantial technical and political questions remain over how such a system would interact with national VAT returns, deductions, refunds, e-invoicing and digital reporting requirements.
