No new European Commission VAT legislative initiatives as Europe prepares for its biggest VAT overhaul since 1977
But will national digital reporting systems undermine simplification?
The European Commission published its 2027 Work Programme on 4 November 2026, prioritising regulatory simplification, competitiveness and reducing administrative burdens.
There are no major new VAT legislative initiatives. But that is hardly surprising. With VAT in the Digital Age (ViDA) adopted in March 2025, the EU has already set the course for arguably its biggest VAT overhaul since the Sixth VAT Directive of 1977.
ViDA implementation takes centre stage
Annex I contains no new legislative initiatives specifically addressing VAT, e-invoicing or digital reporting.
Instead, ViDA is progressing towards its main implementation deadlines in 2028 and 2030, covering Single VAT Registration, platform economy reforms and mandatory digital reporting of intra-EU transactions. The focus is now on 27 EU member states ViDA implementations.
Meanwhile, Member States are developing domestic e-invoicing and reporting systems, frequently with different technical standards and compliance requirements.
The Commission’s ongoing review of VAT rules affecting the circular economy is another omission. A consultation launched in September 2026 examines second-hand goods, the destruction of viable goods and input VAT deductions for business passenger cars. Its evaluation is expected in early 2027, but no legislative proposal appears in the Work Programme.
Commission promises crackdown on national gold-plating
Perhaps the most relevant announcement for VAT compliance is the proposed Pact against gold-plating.
Gold-plating occurs when Member States introduce additional national requirements when implementing EU legislation, increasing compliance burdens beyond those required by the EU framework.
The Commission wants greater transparency about such additions and mechanisms to review and remove unnecessary regulatory burdens.
This has particular relevance for VAT digitalisation. National e-invoicing and e-reporting systems are emerging with different technical standards, reporting obligations, implementation schedules and validation requirements.
ViDA establishes common digital reporting requirements for intra-EU transactions from July 2030. However, considerable national flexibility remains, particularly for domestic transactions.
The Work Programme does not specifically commit to applying the proposed Pact to ViDA. Nevertheless, the proliferation of different national digital reporting regimes presents an obvious test of the Commission’s simplification ambitions.
See the issues we’ve highlighted recently in German e-invoicing validity or the Hungarian vs Romanian pre-filled VAT returns.
Can VAT digitalisation deliver simplification?
The Commission’s 2027 priorities emphasise reducing regulatory burdens and removing unnecessary barriers within the Single Market.
Yet electronic invoicing and transaction-level reporting, while promising greater automation and transparency, can also increase compliance costs when businesses must accommodate multiple national systems.
Digitalising VAT compliance doesn’t eliminate tax complexity. It exposes it.
The challenge now is not to agree another major VAT reform. It is to ensure that the biggest transformation of Europe’s VAT system in nearly 50 years delivers the harmonisation and simplification it promises.
The proposed Pact against gold-plating offers an opportunity to address this. Whether it will extend to VAT remains to be seen.
