- EU member states are nearing an agreement on the VAT in the Digital Age (VIDA) package, with official approval expected on 5 November 2024 at the ECOFIN meeting, followed by a consultation with the European Parliament due to significant changes from the original proposal.
- The VIDA package, introduced in December 2022 by the European Commission, focuses on three main areas: digital reporting, updated platform economy rules, and single VAT registration, with the first and third pillars agreed upon in May.
- Initial progress was hindered by Estonia’s opposition to the deemed supplier model for platforms like Bolt, which would require platforms to collect VAT on certain exempt transactions unless the service provider has a valid VAT ID and declares they will handle VAT.
- Estonia has now agreed to support the compromise from the Hungarian EU Council presidency, which allows member states to exempt SMEs from the deemed supplier regime and includes a staggered implementation starting in July 2028, with mandatory application by January 1, 2030.
- While there is general consensus on the need for clearer VAT regulations in the platform economy, questions remain about the effectiveness of the ViDA proposals even if they are approved.
Source Aleksandra Bal
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