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ECOFIN Council Cannot Find Consensus in VAT in Digital Age (ViDA)

At the ECOFIN council meeting of May 14, an agreement on the VAT in the Digital Age (ViDA) proposal was not achieved due to Estonia’s objection to the ‘deemed supplier’ rules for the platform economy in the taxi and accommodation sectors. Despite compromises, the Estonian finance minister argued that the deemed supplier model would violate VAT neutrality principles for SMEs working with platforms in these sectors. The Estonian minister proposed a compromise to make this rule optional for EU member states, but other member states are opposed due to concerns about competitive distortion. All other aspects of the amended ViDA proposal appear to have reached a consensus and will be included in the ViDA package upon its approval. Discussions will continue to find a resolution on this final point, with the ECOFIN council hopeful that an agreement can be reached in the coming weeks, before the end of the Belgian presidency. The Belgian Presidency aims to finalize the ViDA package before transferring responsibilities to Hungary on July 1, 2024. Uncertainty about the future of VAT regulations persists until the next ECOFIN Council meeting on June 21, 2024.

Source SNI


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