EU VAT Committee – Minutes 128th meeting on Nov 17, 2025

VAT Committee – Minutes of the 128th Meeting (17 November 2025)

The VAT Committee is the advisory committee established under Article 398 of the VAT Directive (Directive 2006/112/EC), bringing together representatives of all EU Member States and the European Commission to promote the uniform application of EU VAT rules. Its 128th meeting was a non-public meeting held on 17 November 2025. The Commission published the final minutes as Working Paper No 1120 FINAL on 23 July 2026. The full document is available here.

Summary

ViDA implementation dominated the Commission’s update, covering the implementation strategy (published 24 September 2025), the strategic dialogue hosted by Commissioner Hoekstra on 28 October 2025 with 38 stakeholders, ongoing Digital Reporting Requirements Explanatory Notes, Platform Economy work for rules from 1 July 2028, and Single VAT Registration / secure IOSS milestones running to 1 July 2028.
Four substantive VAT questions were debated, most heading toward draft guidelines: early-termination amounts on continuous supplies of goods (Belgium), VAT refund-period thresholds of EUR 50 vs EUR 400 (Commission), a reduced rate for a Cypriot “Build to Rent” social-housing scheme, and the VAT treatment of IT services provided in exchange for users’ personal data (Italy).
Case law and new-legislation items completed the agenda: digital reporting of the VAT rate and amount on intra-Community transactions (New Articles 262 and 264), lessons from CJEU case C-726/23 Arcomet Towercranes on transfer pricing and VAT, an information paper on 20 recent CJEU rulings, and housekeeping items on notifications, disclosed documents and the disinfection-robots VAT reimbursement.

Commission Update — ViDA and Beyond

The ViDA package occupied the largest share of the Commission’s update. The implementation strategy was adopted in July 2025 and published on TAXUD’s website on 24 September 2025, serving both as an internal planning tool and an external communication framework. An implementation dialogue hosted by Commissioner Hoekstra on 28 October 2025 brought together 38 stakeholders (e-commerce, short-term accommodation and passenger-transport platforms, delivery, fintech, telecoms and software), with conclusions available on the dedicated Commission webpage.

On the Digital Reporting Requirements (DRR), draft Explanatory Notes are being prepared, with first exchanges in the Group on the Future of VAT (20 October 2025) and the VAT Expert Group (7 November 2025). For the Platform Economy, a Fiscalis workshop in Madrid on 17–18 September 2025 prepared Explanatory Notes for the rules applying from 1 July 2028, with a first draft expected by the end of March 2026. On Single VAT Registration (SVR) and secure IOSS, a revision of Implementing Regulation No 194/2020 is planned for adoption in Q1 2026, and the secure IOSS pilot will run through 2026 ahead of an Implementing Regulation by end Q1 2027 and entry into application on 1 July 2028.

Other Commission items included the study on VAT challenges beyond ViDA (draft final report received end October 2025), the OSS portal national VAT rules update, the Travel Package (possible legislative proposal by end 2026), the electronic VAT exemption certificate (Fiscalis workshop 21–22 January 2026), the SME scheme implementation, the report on VAT rate derogations (COM(2025) 585 final, adopted 2 October 2025), and the 2026 list of VAT-exempt gold coins (published 14 November 2025, C/2025/5923).

Topical Issues in the Council

The Chair noted the adoption of Council Directive (EU) 2025/1539 on the incentivised use of the IOSS (18 July 2025), making the supplier or deemed supplier systematically liable for import VAT on distance sales of imported goods. He also flagged the SAFE Regulation (EU) 2025/1106 (adopted 27 May 2025), which in Article 20 introduces a VAT exemption on importation and supply of defence products under common procurement, applicable only at the final army-procurement stage.

Questions on the Application of EU VAT Provisions

3.1. Belgium — Amounts payable upon termination in breach of contract (WP 1116)

The Commission services viewed the amount paid on early termination of a continuous supply-of-goods contract as consideration for a supply of goods (Article 2(1)(a)). Of the twelve delegations that spoke, almost all considered that where termination occurs before any goods are supplied, the amount should qualify as consideration for a supply of services, citing difficulties in establishing the place of supply and applicable rate; four doubted the analogy with vouchers. The Chair indicated draft guidelines would follow the majority view.

3.2. Commission — VAT refunds: refund period thresholds (WP 1117)

Addressing Articles 16 and 17 of the VAT Refund Directive (2008/9/EC), the Commission services took the view that the EUR 50 threshold should apply to all “remainder of the calendar year” applications up to twelve months, since a stricter reading could restrict the fundamental right of deduction. Six of nine delegations agreed; three held that the EUR 50 threshold requires a period shorter than three months. Draft guidelines will be prepared.

3.3. Cyprus — Reduced rate for construction of social housing (WP 1119)

On Article 98(1) and Annex III point 10, the Commission services flagged eight legal and practical issues with the “Build to Rent” scheme (strict interpretation, fiscal neutrality, objective characteristics, targeting, eligible supplies, administrative burden, clawback mechanisms and affordability benchmark). Cyprus explained the scheme targets low-income households, with units rented 30% below market rate for at least ten years. One delegation agreed, stressing the abuse risk where eligibility can only be assessed in the long term rather than at the time of supply.

3.4. Italy — IT services provided in exchange for users’ personal data (WP 1118)

Building on the 2018 unanimous guidelines from the 111th meeting, the Commission services identified three situations: a “free” service using the data; a reduced service after adjusting settings; and a paid monthly fee. They argued situation 1 is not taxable absent a direct link, situation 3 is clearly taxable, and situation 2 may involve a link that is difficult to value. Eleven delegations intervened, many cautious about establishing a direct link and about taxing personal-data provision, citing GDPR constraints and the CJEU judgments in Naturally Yours and Elida Gibbs on the taxable amount. The Chair clarified the question is not about changing existing guidelines but whether, where users can restrict data provision, a direct link exists and how the taxable amount would be determined.

New Legislation

4.1. Digital reporting of VAT rate and amount on intra-Community transactions (WP 1115)

Concerning New Articles 262 and 264, the Commission services proposed that customers report a zero value for both the VAT rate and the amount due where these fields are not included in the invoice, to avoid unequal treatment and excessive burden within the five-day deadline. Thirteen delegations largely agreed, but conditioned support on amending the VAT Directive; two suggested a practical approach based on the EU e-invoicing standard. The Chair concluded that guidelines would not be useful and stressed a pragmatic solution to prevent VIES being fed differently across Member States.

Case Law

5.1. Case C-726/23 Arcomet Towercranes — lessons learned (WP 1114)

The CJEU held that OECD-method transfer-pricing remuneration for intra-group services constitutes consideration for a supply of services (Article 2(1)(c)), and that tax authorities may require evidence beyond the invoice where necessary and proportionate (Articles 168 and 178). The Commission services drew four general conclusions: transfer-pricing adjustments can be subject to VAT; there must be an actual service behind the payment; variable amounts can still be acceptable; and input VAT is deductible but requires evidence. Two delegations were cautious about the added value of guidelines, and the Chair noted any guidelines would be general rather than fact-based.

5.2. Recent CJEU judgments (Information paper)

The Chair drew attention to an information paper with an overview of 20 rulings handed down between 14 April 2025 and 23 October 2025. No delegation requested a case for discussion at a future meeting.

Any Other Business

Items included updated guidance on introducing consultation and notification requests (Article 398, including the new Article 101a option on VAT rates); notifications under Articles 80, 101a, 199 and 199a from the Czech Republic, Poland, Hungary and Slovenia; and the publication of pre-2013 disclosed documents via the Commission’s Transparency search platform and a dedicated CIRCABC folder. Delegates were also reminded of the 28 November 2025 payment deadline for reimbursement of VAT on disinfection robots donated to EU hospitals under the Buy and Donate Directive. The next (129th) meeting is expected to take place online in the second half of April 2026.

Source: Working Paper No 1120 FINAL — Minutes of the 128th meeting (17 November 2025)

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