GC T-393/25 & T-394/25: EU Court Dismisses Challenges to ViDA Rules for Short-Term Rentals

The EU Court ruled against two cases challenging the legality of new ViDA platform economy rules for short-term accommodation rental, determining that the cases were inadmissible due to the litigating parties not having a direct and individual concern as required by Article 263 TFEU.
The new rules under the VAT in the Digital Age Directive aim to address competition distortions between online platform supplies that evade VAT and traditional economy supplies that are subject to VAT, requiring platforms to charge VAT when underlying suppliers do not.
The litigants argued that the new deemed supply rules for the short-term rental sector are disproportionate, discriminatory, and harmful to small operators, but the court’s ruling means these concerns will not be addressed in this legal context.

Sources

Parties and Claims: The Associazione proprietari alloggi dati in locazione turistica (Pro.Loca.Tur.) from Milan, Italy, has initiated legal proceedings against the Council of the European Union. The applicant seeks to annul specific articles from Council Directive (EU) 2025/516 and Implementing Regulation (EU) 2025/518, which are related to VAT rules for the digital economy, particularly concerning short-term accommodation rental services.

Parties and Claims: Nomad Stays Co from France has filed a legal action against the Council of the European Union, seeking to annul specific articles from Council Directive (EU) 2025/516 and Implementing Regulation (EU) 2025/518. The applicant claims that these provisions improperly classify short-term accommodation rental services and impose undue burdens on the sector.

Arguments – in both cases the same

Pleas in Law: The applicant presents seven main arguments:
- Manifest Error of Assessment: The provisions are based on incorrect assumptions about competition between short-term rentals and hotels, supported by unreliable data.
- Infringement of Proportionality: The measures disproportionately affect smaller operators, placing them at a disadvantage compared to larger entities.
- Fiscal Neutrality and Equal Treatment: The rules create unequal VAT treatment among similar services and discriminate between different market participants.
- Legal Certainty and Good Administration: The provisions lack clarity, leading to potential inconsistencies in implementation across EU Member States.
- Fiscal Autonomy and Subsidiarity: The rules impose a uniform VAT framework where national solutions would be more appropriate, lacking justification for EU-wide regulation.
- Freedom to Conduct Business and Property Rights: The regulatory and financial burdens threaten the viability of small platforms, violating fundamental rights.
- Exceeding Implementing Powers: The Council overstepped its authority by defining “facilitation services” in the Implementing Regulation rather than the VAT Directive itself.
Requested Orders: Nomad Stays Co seeks to annul the contested provisions, require the Council to bear its own costs, and cover the applicant’s legal expenses.