What’s VAT reforms are next after VAT in the Digital Age
As the EU VAT in the Digital Age reforms near political agreement for implementation likely between 2025 and 2030, what are the next likely changes? A glimpse has been provided by the EU Commissions VAT Expert Group (VEG).
It has outlined areas for reform to help improve the efficiency of the EU VAT union, for businesses, consumers and tax authorities. These ideas will be worked-up over the rest of 2024.
VEG has indicated the following four areas for investigation:
- Simplification: VAT exemption application; special schemes and how adopted differently between member states; and derogations from the Directive.
- Digitalisation options: use of split payments to tackle fraud; allowing input VAT deductions in One-Stop Shop for pan-EU reporting; crypto-assets and their VAT treatment; further e-invoicing refinements; VAT data storage by authorities; and digital reporting regimes.
- Green VAT; how can VAT be applied to promote EU environmental objectives, including exemptions and deductions?
- VAT 2050: what would the ideal VAT system of 2050 look like?
The next stage is for the VEG to prepare a first report over the Summer, and continue to develop ideas for the rest of 2024.
