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EU VAT in the Digital Age reforms ViDA

ViDA reform conclusions 7 December 2022: Single VAT registration in the EU; Digital Reporting Requirements; and Digital Platforms and VAT

The European Commission is set to publish its VAT in the Digital Age VAT Directive amendments on 7 December 2022. Read our ViDA reform predictions. 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 between 2025 and 2028.

Separate reforms to IOSS VAT return were published in early 2022 and will be concluded in December 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.

EU VAT reforms

Reform (click for details) Update
2025 VAT registration thresholds equivalence foreign businesses On track
Virtual events VAT rule changes Agreed
2024 Payment providers' seller transaction reporting and bookkeeping obligations On track
Digital Reporting Requirements including EU e-invoicing harmonisation Implementation of VAT in the Digital Age?
2023 DAC 7 - marketplace reporting harmonisation On track
Financial Services VAT exemption reform proposals Consultation complete; proposal 2023
Tour operator margin scheme VAT reforms EC undertaking fresh review
2022 IOSS reforms to prevent double taxation Proposals early 2022
EU reduced VAT rate freedoms Enter into force 6 April 2022
VAT in the Digital Age proposals On track for 7 Dec 2022 publication
Single VAT Registration in the EU - extension of OSS On track for 7 Dec 2022 publication
Proposal for VAT treatment of the platform economy On track for 7 Dec 2022 publication
EU DAC8 cryptocurrency tax reporting proposals On track for 7 Dec 2022 publication
VAT Gap Initiative Q3 2022
EU definitive VAT system On hold
2021 One-Stop-Shop (OSS) single EU VAT return In effect since 1 July 2021
Ending €22 import VAT exemption; new IOSS return In effect since 1 July 2021
Marketplace deemed supplier EU VAT reforms In effect since 1 July 2021
2020 EU four Quick Fixes for VAT In effect
Tax authorities anti-VAT fraud cooperation In effect
Tax Action Plan - 25 VAT and other tax reforms roadmap See 'VAT in the Digital Age' and others
2019 Simplification of e-services VAT compliance and thresholds In effect
Single and multi-use vouchers In effect
2018 Lower e-book and publications VAT rates In effect, although not all EU states have adopted the option
EU Generalised Domestic Reverse Charge VAT Mechanism In effect, although no country has adopted this voluntary option
2015 B2C electronic services VAT reforms - MOSS return In effect

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