Reform conclusions expected 16 November 2022: Single VAT registration in the EU; Digital Reporting Requirements; and Digital Platforms and VAT
With public consultations completed and VAT Expert Group review progressed, the European Commission is set to conclude shortly on options for three strands of reforms to the EU VAT regime. A final review paper will be produced this Summer, with Directive Amendments on 16 November 2022. The reforms look at: simplifying VAT registrations for cross-border B2C and B2B transactions; harmonising live transaction reporting and e-invoicing; and bringing digital marketplaces further into the VAT collections role. It builds on the success of the EU VAT e-commerce package from 1 July 2021. Any likely implementation is for late 2024 or 2025.
Separate reforms to IOSS VAT return were published in early 2022.
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. Single VAT registration in the EU; 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 further cross-border B2C and all / any B2B transactions (e.g. movement of own stock across borders) to reduce the foreign, non-resident VAT registrations and returns burden |
| More details on Single VAT Registration in the EU | |
| 2. Digital Reporting Requirements; e-invoicing | 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) | |
| 3. 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 | |
These three reforms in the VAT in the Digital Age package spring from the 2020 Tax Action Plan proposals, 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.
The EU 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.
