Briefing Document & Podcast: VAT in the Digital Age (ViDA) – Platform Economy

SUMMARY

Executive Summary:

The Platform Economy pillar of the EU’s ViDA reform aims to modernize VAT rules for online platforms by shifting the responsibility for VAT collection and remittance in certain situations. The core change involves making digital platforms (like Airbnb and Uber) liable for charging and remitting VAT on short-term accommodation rentals (≤30 nights) and passenger transport services when the underlying service providers are not VAT-registered. This addresses the problem of up to 70% of suppliers using platforms not being VAT registered. The reform aims to level the playing field between traditional and platform-based businesses and increase VAT revenue by an estimated €6.5–6.6 billion per year EU-wide. While initially proposed to also extend to goods sold via platforms, member states rejected this aspect of the reform. Implementation is slated to be mandatory EU-wide by January 1, 2030, with some countries potentially implementing it earlier. The One-Stop-Shop (OSS) system is vital for simplifying compliance.

1. Core Objectives and Key Changes:

• Addressing VAT Evasion: The primary goal is to combat VAT evasion that occurs when individual service providers (e.g., Airbnb hosts, Uber drivers) are not VAT-registered.
• Deemed Supplier Rule: “ViDA’s solution is to extend the ‘deemed supplier’ approach: in certain cases, the platform is treated as if it bought and resold the product or service, making the platform responsible for VAT, instead of the underlying supplier.”
• Level Playing Field: The reform seeks to create a “fair economic ecosystem” between traditional businesses (hotels, taxis) that already charge VAT and platform-based services that may have avoided it. Vertex Inc source.
• Increased VAT Revenue: The EU anticipates significant increases in VAT revenue due to improved compliance.
• Specific Services Targeted: The “deemed supplier” rule primarily applies to:
  • Short-term accommodation rentals (defined as rentals ≤30 nights).
  • Passenger transport services by road (ride-hailing).
• Conditions for Platform Liability: Platforms become liable for VAT collection only when the underlying service provider is not a VAT-registered business already charging VAT. Platforms are required to verify VAT status.

2. Scope of the Reform:

• Services: The core of the Platform Economy pillar focuses on services, especially short-term accommodation and passenger transport.
• Goods: The original proposal to expand the “deemed supplier” model to all goods sold via platforms was rejected by member states. The existing VAT rules for goods sold via platforms (from the 2021 e-commerce reform) will remain in place, although OSS simplifications may still benefit goods sellers.
  • “The official agreement explicitly decided not to extend the platform-deemed-supplier provision to all goods transactions, and not to change existing rules on second-hand goods or margin schemes. “

3. The Role of the One-Stop-Shop (OSS):

• Simplifying Compliance: The OSS system is crucial for simplifying VAT compliance for platforms operating across multiple EU jurisdictions. It allows businesses to register for VAT in one EU member state and declare and pay VAT for all other member states through a single online portal.
  • “From 2025–2028, the OSS will be expanded to cover more scenarios, including certain domestic sales, movement of own stock, and potentially making import OSS usage more widespread.”

4. Industry Reactions and Stakeholder Perspectives:

• Tax Authorities & EU Institutions: “Strongly supportive.” They see the reform as a way to capture lost VAT revenue and close the “VAT gap.”
• Traditional Industries (Hospitality & Transport): Supportive. These businesses expect a fairer competitive environment.
• Digital Platforms: Cautiously accepting, but concerned about complexity. They pushed for more time to implement the changes and raised concerns about the impact on small businesses. “Platforms lobbied for more time to implement the changes: the European Commission’s initial target of 2025 was seen as too soon to overhaul systems across 27 countries.”
• Small Providers on Platforms: Mixed feelings. Their services may become subject to VAT, potentially increasing prices for consumers or reducing net earnings. Some member states may offer exemptions for small businesses.
• EU Member States: Nearly unanimous after compromise. Concerns about small businesses and implementation timelines were addressed by phasing in the rules and allowing exemptions.

5. Implementation Challenges and Considerations:

• Complex IT and Systems Upgrades: “Integrating VAT calculation for potentially every transaction in the EU, determining the correct VAT rate based on the service’s location (which could vary by city/country) and the status of the provider.”
• Data Management and Reporting: Platforms must store detailed information on every service facilitated and potentially transmit this data to tax authorities.
• Education and Onboarding of Small Suppliers: Platforms need to educate their users about the new requirements.
• Differing Member State Choices: SME exemptions and implementation timelines can vary across member states.
• Ensuring Compliance and Enforcement: Monitoring platform compliance and dealing with non-EU platforms will be a challenge.

6. Impact on Businesses:

• Platforms Operating Digital Marketplaces: Require significant system upgrades for VAT calculation, invoicing, reporting, and One-Stop-Shop integration. Need to proactively communicate with users about the changes and update terms of service.
• Businesses Selling Goods or Services via Platforms: Need to monitor VAT collection by platforms on their sales, adjust pricing and margins as needed, and align contractual and reporting processes.
• “Enhanced Compliance Monitoring: As an enterprise tax leader, you should recognize that tax authorities will have more visibility into platform-based transactions.”

7. Key Action Items for Regional Tax Directors and Corporate Finance Professionals:

• Early compliance preparation:
• Updating internal systems: Integrate tax calculation engines, manage VAT registration, and implement One-Stop-Shop (OSS).
• User onboarding and communication: Ensure sellers and service providers understand the upcoming changes.
• Lobbying and Policy Engagement: Participate in industry groups and tax committees to stay informed of regulatory developments and advocate for manageable compliance solutions.
• Prepare for e-invoicing.
  • “The shift to deemed supplier will alter how revenue flows are recorded in your accounts.”

8. Timeline:

• Voluntary application may start by mid-2028.
• Mandatory EU-wide implementation by January 1, 2030.

This briefing document summarizes the key information and prepares you for a more detailed understanding of the ViDA Platform Economy pillar. The document highlights the changes, implications, and challenges, while also providing actionable steps for businesses to ensure compliance and leverage the benefits of this reform.

INDEPTH ANALYSIS

ViDA Platform Economy Pillar – In-Depth Analysis

1. EU Commission’s Proposals & Legal Changes in the Platform Economy Pillar

a. Platform-Facilitated Services: Short-Term Accommodation & Passenger Transport

• Scope of Services: It covers **short-term accommodation rentals (defined as rentals ≤30 nights) and passenger transport by road. By defining “short-term” rentals as hotel-like stays (up to 30 days with no interruption), the law ensures these platform bookings are treated like hotel services and not exempt as long-term property leases. Traditional hotel stays were always subject to VAT; now a similar vacation rental via a platform will be, too. [nortonrose…bright.com], [grantthornton.nl] [staxxer.com], [nortonrose…bright.com]
• When Platforms Become Liable: The platform steps in to collect VAT only if the underlying service provider doesn’t. In other words, if the host or driver is not a VAT-registered business who charges VAT (e.g. a private person or a small enterprise under exemption) then the platform must apply VAT. If, however, the provider is a registered business charging VAT themselves, they remain responsible for the tax. Practically, platforms will require such providers to submit a valid VAT identification number and an explicit declaration that they will handle the VAT on their sales. Simply giving a VAT number may not be enough – platforms must also confirm the seller’s intent to charge VAT (and tax authorities may require platforms to verify the VAT IDs for authenticity). [greekcitytimes.com], [greekcitytimes.com] [grantthornton.nl], [forbes.com] [forbes.com], [forbes.com]
• Optional Exemptions for Small Businesses: To avoid over-burdening microbusinesses, the rules allow some flexibility. Member States may choose to exclude suppliers who fall under the EU’s small business VAT exemption (SME scheme) from this deemed-supplier mechanism. In plain terms, a country can decide that if a host/driver’s turnover is below the VAT registration threshold and they are eligible for VAT exemption, the platform does not have to impose VAT on those particular services. This carve-out, however, is optional for each country – meaning companies operating across the EU will need to navigate potentially different treatments in different markets. [consilium.europa.eu], [grantthornton.nl]
• Record-Keeping and Reporting: Even when a platform is not deemed the supplier (because the provider has taken on the VAT), the new rules impose additional obligations on the platform. Platforms will be required to collect and retain detailed records of all facilitated transactions in these categories and even transmit certain data to tax authorities on request. This ensures that if, say, an apartment host claims to handle VAT, the platform still logs that rental in case authorities want to verify the host’s compliance. Essentially, nothing slips through unnoticed: either the platform pays the VAT or it must have auditable evidence of the transaction and the provider’s VAT status. [kpmg.com], [staxxer.com]
• Legal Instruments: These changes entail amending the EU VAT Directive (introducing a new Article 28a) and the Implementing Regulation 282/2011. The Implementing Regulation will be updated to include a clear definition of an “electronic interface” (platform) in the context of accommodation and transport services, and to codify the use of VAT identification numbers as the key indicator of who is responsible for VAT. Also, by classifying the platform’s role as an “intermediary service” for VAT, the law standardizes the place-of-supply rule: the platform’s service fee to the consumer will be taxed in the same country as the underlying service, preventing platforms from arguing those fees are e-services taxed elsewhere. [kpmg.com] [grantthornton.nl]

b. Goods Sold via Online Platforms: E-Commerce and Cross-Border B2C Goods

2. Industry Reactions and Stakeholder Perspectives

• Tax Authorities & EU Institutions:
  • Strongly supportive. The European Commission and member state tax authorities championed these changes as a way to capture lost VAT revenue and close the “VAT gap.” By their estimates, letting platforms collect VAT on untaxed services will boost EU-wide VAT revenues by billions annually. Officials also emphasize fairness: the new rules remove an unwarranted advantage that some digital businesses had. Traditional companies that must charge VAT (hotels, licensed taxis, etc.) were at a competitive disadvantage; leveling the tax treatment creates a “fair economic ecosystem” across old and new business models. The Council’s press release hailed the agreement as a “cornerstone for the digital transition” and a big step for a more competitive, fraud-proof EU VAT system. There is a clear expectation from authorities that compliance will improve: many small providers were unaware of VAT obligations, but putting the onus on large platforms (who have the means to comply) should ensure that tax is actually collected. [staxxer.com], [greekcitytimes.com] [vertexinc.com], [vertexinc.com] [consilium.europa.eu] [vertexinc.com]
• Traditional Industries (Hospitality & Transport):
  • Supportive. Businesses like hotel chains, taxi companies, and other incumbent service providers have generally welcomed the reform. Organizations representing these industries long complained that companies using models like Airbnb and Uber could underprice them by not charging VAT. For example, hotel associations have argued that a private Airbnb host effectively gave a ~10-20% price advantage (since no VAT) that hotels couldn’t match while staying legal. Now, with platforms charging VAT on those rentals and rides, traditional providers see a fairer competitive environment. Some have lobbied actively in Brussels for these changes (the EU Travel Tech sector and hospitality lobby supported the Commission’s goals to tax platform rentals like hotels). They expect the rule change to remove distortions in the market and have applauded the EU for addressing this inequality. [vertexinc.com], [vertexinc.com]
• Digital Platforms:
  • Cautiously accepting, but concerned about complexity. The major platform companies (Airbnb, Uber, Bolt, Booking.com, Amazon Marketplace, etc.) knew such regulation was coming and have been involved in consultations. Publicly, they have expressed willingness to comply and to help streamline tax collection, but they pushed back on aggressive timelines and certain all-encompassing obligations. For instance, platforms lobbied for more time to implement the changes: the European Commission’s initial target of 2025 was seen as too soon to overhaul systems across 27 countries. Indeed, member states and platforms collectively argued for a delay to 2028/2030, which was granted. Platforms also raised concerns about small businesses on their sites – echoing some governments’ worries that forcing VAT too quickly could hurt participation of casual providers. As a result, concessions like the SME exclusion option were added. [greekcitytimes.com]
    Overall, large platforms appear to be gearing up to handle the new rules. Airbnb, for example, has already begun piloting VAT collection systems in countries like France to test how to charge VAT for hosts smoothly. This proactive step suggests that while the platforms know compliance will entail costs (and likely passing some of those costs along in fees or higher prices), they prefer to adapt in a controlled way. Uber and other ride-hailing apps will face similar adjustments – many have experience with VAT in various countries, but the uniform EU rule will require system changes and perhaps driver education. A potential negative reaction from platforms is the fear of reduced usage: if adding VAT makes rides or stays more expensive for consumers, demand might dip, or small suppliers might exit if their earnings drop. However, given VAT is a consumption tax ultimately borne by the customer, platforms may not be too severely impacted beyond the administrative overhead; they just become tax intermediaries. [greekcitytimes.com]
• Small Providers on Platforms:
  • Mixed feelings. This group wasn’t formally represented in legislative negotiations but will feel the effects. For casual hosts or drivers who currently don’t charge VAT, the new regime means their services will become subject to VAT – effectively increasing the price to the consumer (or forcing the provider to swallow the cost by lowering their net earnings). Some may worry this makes them less competitive or that demand will fall. On the other hand, if all similar providers on the platform are subject to the same VAT, the competitive playing field among peer providers remains level. There could be more resistance in countries with very high VAT rates, where the price jump is noticeable. Member states like Estonia voiced concerns on behalf of SMEs, highlighting that the burden might be disproportionate for them. In response, the final rules allow excluding genuine small businesses from platform VAT to protect them. This indicates some acknowledgement of their plight. Going forward, these providers might need education – many will have to learn about VAT (even if they aren’t the ones remitting it, they might need to provide info to the platform). Some may even decide to formally register for VAT if their volumes grow, since the platform VAT will remove the benefit of staying unregistered. [greekcitytimes.com] [consilium.europa.eu]
• EU Member States:
  • Nearly unanimous after compromise. Unanimity was required to pass the ViDA package. Initially, a few countries hesitated. As noted, Estonia had reservations about the platform rules (likely about impact on small entrepreneurs). Spain requested an option to postpone implementation to 2030 (which it got). After negotiations, all finance ministers agreed by November 2024, indicating broad support once flexibility was included. Some member states that already have digital tax systems (e.g. France, which has a tourist tax and some platform reporting obligations) were very much in favor. Countries heavily reliant on tourism (Italy, Greece, Spain) also pushed for taxing Airbnb-type rentals to increase their tax base. On the other hand, countries with many small entrepreneurs in the gig economy might have been slower to agree. The final deal giving a long lead time and carve-outs was key to getting everyone on board. Member states now see this as a done deal and are starting national legislative adjustments. Importantly, the Council opted to drop the broader goods proposals and handle them separately, which likely helped get consensus (some countries were uneasy about, say, forcing all marketplace goods under platform VAT). By splitting that off, they removed a sticking point. [greekcitytimes.com] [nortonrose…bright.com] [consilium.europa.eu]

3. Implementation Challenges and Considerations

• Complex IT and Systems Upgrades for Platforms:
  • Online platforms will have to make extensive changes to their systems. They must integrate VAT calculation for potentially every transaction in the EU, determining the correct VAT rate based on the service’s location (which could vary by city/country) and the status of the provider. For example, Airbnb will need to know, for each booking, whether the host is VAT-registered in that country; if not, it must calculate VAT (at, say, 20% in France or 7% in Germany for accommodation) and add it to the charge. This requires real-time tax determination and invoicing capabilities that some platforms previously only used for a subset of transactions. Additionally, verifying VAT numbers provided by sellers will likely mean connecting to EU VAT databases (VIES) to check validity. Building a seamless user experience that handles these tax distinctions (without confusing users or losing bookings) is non-trivial. Platforms will also have to generate VAT-compliant invoices/receipts to customers when they are the deemed supplier, and file VAT returns in potentially all 27 EU jurisdictions. The One-Stop-Shop (OSS) will help – a platform can register in one EU country and declare VAT for all other member states through that single interface – but even using OSS involves mapping each sale to the correct country’s tax in the backend. Ensuring accuracy and preventing any loopholes (e.g. a user trying to misrepresent their status to avoid VAT) will be a top priority in system design. This is a costly and time-consuming effort, which is exactly why platforms and some ministers insisted on a long lead time. The five-year implementation window is largely to allow for these IT overhauls. [forbes.com] [greekcitytimes.com]
• Data Management and Reporting:
  • The record-keeping requirement means platforms must store detailed information on every service facilitated – including those where the platform didn’t charge VAT (because the seller did). This could include data like the provider’s identity and VAT number, the customer’s details, transaction date, value, and evidence of VAT handling. Transmitting this data to tax authorities might be required periodically or upon request. Handling such large data flows securely and in compliance with privacy laws adds another layer of complexity. Tax authorities might develop standardized formats or use the existing DAC7 framework (which already obliges platforms to report sellers’ income for tax purposes) to collect this VAT-related data. Companies will need to ensure their databases and reporting tools can extract and send the required fields. Mistakes or omissions in record-keeping could lead to audits or penalties, so accuracy is crucial.
• Education and Onboarding of Small Suppliers:
  • Many individuals or very small businesses using these platforms are not tax experts. To avoid chaos when the rules kick in, platforms will need to educate their users. This means clear communication that “from [implementation date], VAT will be added to your service’s price if you do not provide a valid VAT number.” Some providers might choose to register for VAT voluntarily as a result – especially if they operate at a scale close to or above the exemption threshold. There could be confusion, for instance, if a host in one country says “I’m below threshold so I don’t have a VAT number” but the platform in that country is still required to charge VAT because the government didn’t exempt small suppliers from deemed supplier rules. Managing these scenarios diplomatically is key to keeping providers on the platform. Platforms may need to create support services or tools (perhaps partnering with tax advisors) to help their users navigate the new requirements (e.g., “Here’s how you can get a VAT number and what it means for you”). Uniform application vs. country-specific differences also complicates messaging; providers might not realize why in one country the platform is charging VAT on their sales and in another country it might not (due to a local SME exemption). Thus, user education must be tailored by jurisdiction.
• Differing Member State Choices:
  • Although the rules are EU-wide, certain options (like SME exemptions or postponing to 2030) are at the discretion of each Member State. This patchwork can be challenging. For instance, if Country A implements the platform VAT rules in July 2028 and does not exempt small suppliers, but Country B delays until 2030 or does exempt small suppliers, a platform operating in both must handle two regimes. For two years, the platform would charge VAT on in-scope services in Country A but not in Country B. This requires geo-specific logic in the platform’s systems and careful tracking. Additionally, if a country excludes SME supplies from the platform rule, it might require an official list or criteria to identify those SMEs – possibly requiring the platform to validate if a provider qualifies as an SME under that country’s rules (which could depend on annual turnover). Monitoring each state’s implementation choice and timeline is itself a project management challenge. Tax directors in large platform companies will likely coordinate with local advisors in all EU markets to keep track of these details up to 2030. [nortonrose…bright.com], [grantthornton.nl]
• Ensuring Compliance and Enforcement:
  • From the perspective of tax authorities, a challenge will be monitoring platform compliance and dealing with non-EU platforms. Big well-known companies will cooperate, but what about smaller or foreign platforms facilitating similar services? For example, if a platform based outside the EU (with no EU presence) facilitates short-term rentals in Europe, how will EU tax authorities enforce the new rules on it? The legislation will compel any “electronic interface” supplying such services in the EU to register and comply, but enforcement might require international cooperation or geoblocking non-compliant platforms. The EU may need to rely on the threat of blocking access or leverage the significant market size to get compliance. Additionally, verifying that when a platform says “the provider gave me a VAT number, so I didn’t charge VAT,” that provider actually did report and pay the VAT, is a challenge. Tax authorities might cross-match platform reports with VAT returns of hosts/drivers who provided VAT numbers. The DAC7 information that platforms will send (covering income of sellers) can help tax authorities identify those individuals and see if they declared VAT. So an integrated auditing approach will be necessary, possibly involving new cross-border data-sharing between tax authorities. In essence, the authorities gain more data and a clear target (platforms) for enforcement, but they must also close any loop where a fraudulent seller might give a fake VAT number or misuse an exemption. [consilium.europa.eu], [consilium.europa.eu]
• Price and Market Adjustments:
  • Economically, implementing VAT where it wasn’t applied before could alter market dynamics. Service prices to consumers are likely to rise by roughly the VAT rate in each country for the affected transactions. Platforms and providers will have to decide how that cost is split. In many cases, the easiest approach is to simply add VAT on top of the existing price (meaning consumers see higher total charges – e.g. a €100/night rental becomes €121 with VAT in a 21% VAT country). This might reduce demand slightly, but because it affects all similar providers, the competitive impact may be minimal within the platform. However, platforms worry about user experience – price-sensitive customers might curtail their usage. Some platforms might choose to absorb a portion of the VAT into their fees initially to soften the impact, especially in particularly competitive markets. Others might heavily communicate the benefits (e.g., “Taxes included” to emphasize trust and compliance). Accounting and reconciliation will also become more complex: platforms will hold significant VAT amounts from customers that need to be remitted, separate from their own revenue. Strong internal controls will be needed to manage these funds. From a cash flow perspective, platforms will essentially be forwarding taxes to governments regularly, which could be a new cash management consideration (though OSS typically requires quarterly remittance, so it’s not instantaneous).
• Intersection with Digital Reporting Requirements:
  • Another ViDA pillar is the Digital Reporting and e-Invoicing mandate (by 2030). Platforms that become VAT collectors will likely fall under new real-time reporting regimes as well. For instance, if e-invoicing becomes standard for cross-border B2B and B2C, platforms might be required to issue structured invoices for each transaction and report them in real-time to tax authorities. This dovetails with the platform’s own need to maintain records. The simultaneous rollout of digital reporting means platforms and companies must align their system upgrades to handle both requirements – essentially building end-to-end tax compliance automation (invoice generation, reporting, and VAT filing). While challenging, this could also be an opportunity: developing one integrated solution that covers invoicing, reporting, and OSS filing for all platform transactions. Large corporations may work with tax technology providers to implement such solutions, given the scale of data. [nortonrose…bright.com], [nortonrose…bright.com]
• Future Uncertainties:
  • As mentioned, some issues were left for future discussions (such as possibly mandatory use of IOSS for imports, or any revisit of goods deeming in customs context). Companies must stay agile because further changes after ViDA could impose new requirements. Additionally, if the platform rules somehow lead to unintended avoidance schemes (for example, providers trying creative ways to mask their transactions or shift to platforms outside scope), the EU may respond with tweaks. Continuous monitoring of guidance from the Commission and local tax authorities will be necessary through the implementation period. [forbes.com]

4. Enterprise Impact – Considerations for Company Operations, Compliance & Reporting

• If your company operates a digital platform or marketplace: You will be directly subject to the new VAT rules. This is common in industries like online marketplaces for goods, travel booking services, or gig-economy apps. In this case, early compliance preparation is critical. Key action points include:
  • Systems and Process Upgrades: Begin scoping and budgeting now for the IT development needed to handle VAT on facilitated transactions. This means implementing tax calculation engines that can determine the correct VAT treatment based on seller status and location of service, issuing compliant invoices to customers, and capturing the needed data for reporting. Given the lead time, a phased approach (perhaps piloting in one country or segment first) could help. For example, you might emulate what Airbnb did in France – trial the process in one jurisdiction to identify pitfalls, then scale up. [kpmg.com], [forbes.com] [greekcitytimes.com]
  • VAT Registration and One-Stop-Shop (OSS): Evaluate your VAT registration strategy. Under the new rules, a platform facilitating in multiple countries can avoid registering in every single member state by using the extended OSS system to report all VAT in one member state. Decide which country to register in as your OSS “home”; many companies choose a country where they have a substantial EU presence or a favorable administrative environment. Ensure that by the go-live date, you have that OSS registration in place. This will simplify ongoing compliance, as you’ll file one consolidated VAT return for all EU sales via the platform (covering the VAT collected for each country’s transactions). [greekcitytimes.com], [consilium.europa.eu]
  • User Onboarding & Communication: Start communicating with third-party sellers or service providers on your platform about the upcoming changes. Well before VAT gets added, your users should understand what information you’ll require (e.g. providing their VAT number, confirming their tax status). Consider providing resources or even assisting some high-volume sellers with VAT registration if needed. Proactively addressing user concerns (like “Will this affect my income?”) can maintain trust. It’s better for a provider to hear from you in advance rather than discovering suddenly that a chunk of their revenue is being remitted as tax. Also ensure your terms of service and contracts with users are updated to reflect the new tax handling responsibilities. [grantthornton.nl], [forbes.com]
  • Compliance and Audit Readiness: Put in place robust processes for record-keeping and reporting. Since you’ll have to keep data on transactions where you might not charge VAT (because the seller does), build or adapt databases to flag each transaction’s VAT treatment and store required details (transaction value, date, seller ID, VAT number if any, etc.). This will feed into any tax authority requests or DAC7 reports. Internally, consider conducting compliance audits or simulations once your systems are built – essentially pretending the rules are active and seeing if you can produce the necessary reports and filings accurately. This internal testing can catch issues early, avoiding problems when regulators start scrutinizing real data. [kpmg.com], [staxxer.com]
  • Financial Impact Management: The shift to deemed supplier will alter how revenue flows are recorded in your accounts. Although VAT you collect isn’t your revenue, it will pass through your books. Work with your finance team to set up proper accounting treatments (liability accounts for VAT payable, etc.) so that your financial reports clearly separate platform service fees vs. customer tax. Moreover, anticipate that your platform’s pricing model might need adjustment – if previously you took a commission from providers and now you also must charge customers VAT, you may need to adjust commission rates or fee structures to remain attractive yet cover any additional costs. Some platforms might incorporate a “tax handling fee” or simply accept slightly lower net margins initially. Each enterprise will have to model this out. Make sure such decisions are made in tandem with commercial teams and communicated transparently to avoid confusion or backlash.
• If your company uses third-party platforms to sell goods or services: Many businesses market their products via platforms (for example, consumer goods companies selling on Amazon/eBay, or software firms selling apps through app stores). In these cases, the platform economy rules can indirectly affect your operations:
  • VAT Collection by Platforms on Your Sales: If your company is fully VAT-registered in all relevant jurisdictions and you provide your VAT number to the platform, nothing major changes – you will continue to charge and remit VAT as you do now, and the platform will likely treat your transactions as outside the deemed supplier regime. However, if there are scenarios where you do not have a VAT registration (perhaps a small subsidiary selling below thresholds, or sales into a country where you haven’t registered yet), the platform will step in and start collecting VAT on those sales. This is actually beneficial from a compliance standpoint – it prevents accidental non-compliance – but you need to be aware of it. Monitor the implementation: if a platform notifies you that starting from a certain date it will charge VAT on your behalf for certain markets, you may decide either to accept that (and then exclude those sales from your own VAT filings) or to preemptively register for VAT in that country to retain control. This becomes a strategic choice: some companies might prefer the platform handle it to reduce their compliance workload, while others might want full control over customer pricing and tax. [grantthornton.nl], [forbes.com]
  • Pricing and Margin Considerations: If a platform does begin adding VAT to your product’s price where previously it didn’t, consider the impact on demand and margins. For example, if you sell a digital service via a platform to consumers and previously under the threshold you effectively sold VAT-free, the final price to consumer may rise with VAT. If demand for your product is price-sensitive, you might need to adjust your base price downward to keep the gross price attractive. Conversely, if the platform could have removed your need to register separately, you might save on administrative costs, partially offsetting any margin hit. Work with the platform to understand how they will display pricing – tax-inclusive pricing may become the norm for transparency. You’ll want to ensure your product remains competitively priced after VAT is applied.
  • Contractual and Reporting Alignment: When platforms take on the VAT, ensure that your invoicing and bookkeeping reflect this properly. Typically, when a platform is the deemed supplier, the sale between you and the platform is considered VAT-exempt (or outside scope) and then the platform’s sale to the consumer is with VAT. So you would record a sale to the platform (likely net of VAT) and the platform would record the sale to the end customer with VAT. Confirm with each platform how they will handle invoicing – you may receive “self-billed” invoices or credit notes from them for your portion. Your finance team should be prepared to reconcile these. From a tax reporting perspective, sales where the platform collects VAT should not appear as taxable sales on your VAT return (since you didn’t charge VAT on them). Misreporting could lead to confusion (e.g., double counting revenue or missing a VAT that you think you owe but the platform paid). Clear communication and perhaps updating your internal tax compliance manual for sales via platforms will be necessary. [staxxer.com]
  • Reduced VAT Registration Burdens: On the positive side, the broader ViDA measures (Single VAT Registration) mean your company might be able to streamline its VAT registrations. If you had multiple VAT numbers across Europe for B2C sales, you might consolidate filings via the OSS expansion. If you rely on platforms in some countries rather than a direct presence, you might even decide to deregister in those countries (letting the platform handle VAT) – though this should be done carefully and only if all sales in that country are indeed through platforms that will handle VAT. Always consult with your tax advisors before deregistering anywhere. But the general trend is that ViDA will allow large companies to reduce redundant compliance efforts, either by outsourcing some VAT collection to platforms or by using one-stop mechanisms. This can cut costs and administrative workload for your tax department. [consilium.europa.eu]
• If your company provides short-term accommodation or passenger transport services (directly or via franchise): This is a more specific case, but for example, if you have a division that rents corporate-owned apartments or runs shuttles and you use a platform to find customers, you’ll be directly in the scope of these rules. Ensure those business units are aware: if they are not charging VAT (perhaps some smaller scale operation), that will change. Likely, though, a company-run service would already be VAT-registered. If not, the platform will treat your unit like any other provider and start charging VAT. This could actually prompt an internal decision to integrate that service’s VAT reporting with the rest of the company by registering it.
• Enhanced Compliance Monitoring: As an enterprise tax leader, you should recognize that tax authorities will have more visibility into platform-based transactions. Because platforms must keep records and even share data, it will be harder for any transactions to go unnoticed. If your company has, say, independent distributors or agents that sell on platforms (and perhaps those agents were not fully compliant with VAT), be aware that the net tightening of the system will likely catch such issues. It may be worthwhile to audit your distribution channels: are any of your third-party sellers or resellers possibly benefiting from not charging VAT via online sales? If so, those days are ending, and you should ensure that this doesn’t disrupt your distribution model. In general, the risk of VAT audits in the digital economy will increase, but mostly for platforms. Your company should still maintain strong VAT compliance internally for all sales channels, as usual. [kpmg.com]
• **Prepare for
  **: The ViDA changes (including the platform rules) are part of a larger digitization of tax. This means your company’s tax reporting systems should modernize in tandem. Consider implementing or upgrading to a tax engine or automation software that can handle real-time VAT determinations, digital invoicing, and OSS reporting. This is especially pertinent if you plan to sell via multiple channels (own website, marketplaces, etc.). A unified tax solution can ensure that whether a sale is direct or through a platform, the VAT outcome is correctly handled and documented. For example, if a platform fails to charge VAT for some reason and kicks the transaction back to you, your system should catch that and charge VAT. Or if you switch to direct sales in a market where you used to rely on a platform, you need the infrastructure to assume VAT responsibility seamlessly.
• Policy and Lobbying Engagement: Given your role, you might also engage with industry groups or tax committees (as many large companies do) to stay ahead of any further regulatory developments. The platform economy pillar’s implementation phase is a time when practical issues will surface. The Commission and Member States may issue clarifications or even minor amendments if something isn’t working. By participating in consultations or industry feedback loops, you can voice any concerns relevant to your business. For instance, if your company finds the verification of VAT numbers for thousands of small sellers problematic, you could advocate for a central EU verification service or threshold simplifications. Staying active in these discussions can help shape outcomes that make compliance more manageable for businesses.

• European Council Press Release on ViDA agreement [consilium.europa.eu], [consilium.europa.eu], [consilium.europa.eu]
• Norton Rose Fulbright – “VAT in the Digital Age package finally adopted” [nortonrose…bright.com], [nortonrose…bright.com]
• KPMG – “VAT in the Digital Age: Platform Economy Update” [kpmg.com], [kpmg.com]
• Grant Thornton – “ViDA – new VAT rules for platform economy and e-commerce” [grantthornton.nl], [grantthornton.nl]
• Vertex Inc. – “The Platform Economy and Level Playing Fields” [vertexinc.com], [vertexinc.com]
• Staxxer – “ViDA: the Platform Economy” [staxxer.com], [staxxer.com]
• Forbes (Aleksandra Bal) – “Impact of Revised ViDA Proposals on EU Businesses” [forbes.com], [forbes.com]
• Greek City Times – “EU Approves New VAT Rules for Platforms like Uber & Airbnb” [greekcitytimes.com], [greekcitytimes.com]
• European Commission “VAT in the Digital Age” proposal documents and studies (via secondary sources).

• Join the LinkedIn Group on ”VAT in the Digital Age” (VIDA), click HERE