EU VAT Developments Beyond the ViDA Reforms

The European Commission completed a preliminary review on post-ViDA VAT reform, focusing on simplification, digitalisation, and environmental goals; a final report is expected by December 2025.
Reform topics include VAT exemptions, special schemes, split payments, crypto-asset VAT treatment, e-invoicing enhancements, data storage, and promoting environmental objectives through VAT adjustments.
VEG 2024 proposed broadening the VAT base, improving deduction rights, standardizing data rules, and removing outdated exemptions, derogations, and special schemes to modernize and harmonize the EU VAT framework.
Proposals include shifting to destination-based taxation, reconsidering VAT exemption for financial services, and creating a single EU VAT authority, while limiting VAT’s use in environmental policy to reduce distortions.