EU VAT in the Digital Age (VIDA)

EU FMs agree with ViDA proposals at ECOFIN

EU Finance Ministers provided  the European Commission’s proposed VAT in the Digital Age reforms. At the monthly Economic and Financial Affairs Council (ECOFIN) meeting in Luxembourg, the following points were made:

  1. Digital Reporting Requirements: Broad agreement to harmonise intra-community supplies digital reporting based on structured e-invoicing. However, several concerns:
    • A number of states believe that there should be more flexibility for member states on domestic reporting, and limit the convergence of existing or proposed mandatory e-invoicing. Countries like Italy, Poland, Czech Republic, The Netherlands, Estonia and Lithuania felt countries should be able to set their own standards to reflect costs and existing plans. There remains some disagreement over pre-clearance e-invoicing, or at least some basic validation checks.
    • Many countries were concerned on the 2028 launch date, including Luxembourg. The costs and development for tax payers and authorities could make this impractical.
  2. Platform Economy: Most countries supported the proposal to introduce a deemed supplier model to ride and accommodation sharing platforms. However, there are worries on distortion of competition and neutrality – particularly from France and Ireland. Several countries, including Denmark, asked for more marketplace reporting to be considered.
  3. Extension of OSS:There was near unanimous agreement on this pilar to the one-stop shop VAT return extension and the reverse charge mechanism harmonisation. Some member states, such as Italy and Hungary, commented on the tight deadline of 2025.

Some states have requested 1-year delay on 2028 e-invoicing harmonisation.

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