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VAT in the Digital Age reforms public consultation launched

European Commission call for evidence and public consultation on 3 reforms to EU VAT

The European Commission is inviting feedback on three proposed reforms to improve the efficiency, fairness and tax collections of the 27-member state VAT regime :

EU VAT in the Digital Age reforms

EU VAT in the Digital Age
3 reforms to improve efficiency of VAT for all and reduce fraud
1. Digital Reporting Requirements What options are there to harmonise the digitisation of transaction reporting amongst the member states. The EU is looking at: Continuous Transaction Control (CTC) e-invoicing, live reporting; or Periodic Transaction Controls (PTC) invoice listings. Also if at a country, EU or hybrid-level.
Read more about EU Digital Reporting Requirements (DRR)
2. VAT treatment of the platform economy How can EU member states adapt their tax systems to reflect the new role taken on by Electronic Interfaces - platforms and marketplaces which have enabled millions of private individuals to provide services and goods for the first time. How should the VAT Directive be modified to capture the new dynamics created in the gig and sharing economies, including imposing full deemed supplier VAT obligations on platforms as with 2021 e-commerce package for goods.
EU VAT Treatment of Platform Economy update
3. Single EU VAT registration; extension of OSS to all B2C and certain B2B Following the 1 July 2021 introduction of the One Stop-Shop (OSS), can this be extended to cover more B2C and all / any B2B transactions (e.g. movement of own stock across borders) to reduce the foreign, non-resident VAT registrations and reporting burden
More details on Single EU VAT Registration

Separate reforms to OSS and IOSS were published in early 2022. These three reforms in the Digital Age package spring from the 2020 Tax Package measures and follows the completion of the EU VAT e-commerce package on 1 July 2021. Want regular updates on these reforms? Sign-up for our free global VAT and GST news.

VAT in the Digital Age covers three strands (see below) of indirect tax policy. It is seeking to reimagine how VAT intersects with the emerging digital economy and how opportunities afforded by new technologies can improve collections, reduce compliance costs and cut the VAT Gap fraud. But whatever emerges, we have you covered at VAT Calc. Our single application tax engine and returns filing products are built on legislation, and not standard use cases with cash-sucking fiddly customs rules. So whatever the EU lands on us all being obliged to do, you will be ready to pivot to.

2022 VAT in the Digital Age reform schedule

The EC plans the following schedule for the three reform strands:

  1. 20 Jan to 17 Feb 2022 public call for evidence. The Call for evidence combines two steps that were previously sequential: the roadmap/inception impact assessment and the questionnaire (where relevant).
  2. 21 Jan to 5 May 2022 public consultation The consultation seeks stakeholders’ views on whether the current VAT rules are adapted to the digital age, and on how digital technology can be used both to help Member States fight VAT fraud and to benefit businesses.
  3. Roadmaps and impact assessments will be provided with opportunities to comment July 2022;
  4. Q3 2022 proposed Directive amendments to enacted reforms.

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