VAT in the Digital Age
- On 8 December 2022, the Commission issued its package “VAT rules for the digital age”, containing three proposals:
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- a proposal for a Council Directive amending Directive 2006/112/EC as regards VAT rules for the digital age
- a proposal for a Council Regulation amending Regulation (EU) No 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital age; and
- a proposal for a Council Implementing Regulation amending Implementing Regulation (EU) No 282/2011 as regards information requirements for certain VAT schemes
- The package has three objectives. Firstly, it sets out to modernise the VAT reporting obligations by introducing digital reporting requirements based on electronic invoicing. Secondly, it intends to address the challenges of the platform economy by updating the applicable VAT rules. And thirdly, it seeks to address administrative burden by moving towards a single VAT registration.
- The Commission presented its package at a Working Party meeting under the Czech Presidency, and the Swedish Presidency started its work on the package, including compromise texts on all three aspects of the proposals, which were welcomed by the delegations as a solid basis for further work.
- To steer the further work on this file, on 16 June 2023 the Council held a policy debate on the proposals, which was prepared by the HLWP on 1 June 2023. In the debate, Ministers generally welcomed the broad lines of the Commission proposals and the progress made under the Swedish Presidency. Many ministers also requested flexibility on domestic digital reporting frameworks as well as further work on the exact form of the enhanced role of platforms in the collection of VAT in the area of short-term accommodation rental and passenger transport services.
- Whereas the Spanish Presidency pursued the work on all three parts of the package, the progress was most tangible on the platform economy and the single VAT registration.
- On the parts related to the single VAT registration, the Presidency accommodated the concerns of many delegations by removing the parts of the proposal related to the extension of the deemed supplier provision and to works of art and second-hand goods. The new feature related to a mandatory import one-stop-shop was postponed to be discussed in relation with the VAT aspects of the reform of the Union Customs Code, also due to objections to a mandatory use of the IOSS from several Member States, as well as the proposal from a few of them to explore alternative solutions.
- On the part related to the platforms, the Presidency pursued a strategy to reconcile the position of delegations with doubts with respect to the deemed supplier rule or seeking more flexibility regarding short-term accommodation rental and passenger transportation services and those trying to minimise the fragmentation in the internal market. While a majority of Member States support the latest Presidency compromise text, some delegations could not support it and some suggested an optional application of the deemed supplier rule, with a few of them suggesting the substitution of the deemed supplier rule by reporting obligations.
- The file was discussed at eight WPTQ meetings held in July, September, October and November as well as in two HLWP meetings held in July and in November. Detailed progress on the package is further explained in the progress report ST 15877/23.
Source data.consolium.europa.eu
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