EU VAT in the Digital Age (VIDA)
Potential revised launch for 3 pillar ViDA reforms
to come in February 2024:
- Pillar 1, Digital Reporting Requirements and e-invoicing, delayed from 2028 to 2030 or even 2032. This pillar requires more technical discussions and agreements. It introduces mandatory structured VAT e-invoicing for suppliers and digital reporting of intra-community B2B transactions by suppliers and customers.
- Pillar 2, Platform Economy deemed supplier, still needs high-level agreement. Most of the member states are in agreement, but a few still pushing for optional deemed supplier. Likely delayed until 2026. This pillar shifts VAT collections (deemed supplier) to home and ride sharing platforms and intermediaries. Other discussion points:
- Exemptions for smaller businesses from the digital platform deemed supplier obligations
- Shortening the proposed 45-days rental threshold for the new deemed supplier obligations to 31 days
- Pillar 3, Single VAT Registration, is largely agreed. Again, possible delay to 2026. This pillar covers an extension of OSS single VAT return for e-commerce and certain B2B goods movements cross-border movements; and harmonisation of non-resident VAT reverse charge rules. However, the following provisions have been dropped:
- extension of deemed supplier for marketplaces on EU seller trade;
- mandatory IOSS for all consignment imports postponed till 2028 EU Customs Reforms; and
- works of art and second-hand goods.
The EU Parliament’s ECON had voted on 23 October 2023 for a one-year delay to all 3 ViDA pillars. However, this is non-binding but certainly reflects concerns that businesses and tax authorities will not be ready by 2025 for pillars 2 and 3.
