- ViDA modernises VAT without changing its foundations: The reform introduces major operational changes (DRR, platform rules, OSS expansion), but fundamental EU VAT principles—neutrality, proportionality, taxpayer rights, and privacy—remain binding and continue to shape interpretation and validity.
- DRR creates significant procedural and data protection challenges: Real-time invoice reporting and data matching must comply with Charter rights (defence, good administration, effective remedy) and GDPR principles (data minimisation, purpose limitation, transparency), meaning automated flags cannot replace individual assessment.
- Automation is allowed but strictly limited by taxpayer rights: CJEU case law requires that algorithmic outputs be explainable, rebuttable, and used only as inputs to decisions—not as decisions themselves—ensuring full access to evidence and the right to be heard.
- Substance over form still prevails despite new formal requirements: Even with stricter e-invoicing obligations, the right to deduct cannot be denied solely due to formal errors if substantive conditions are met and the taxpayer acts in good faith.
- Platform deemed supplier regime creates structural neutrality issues: Platforms may face VAT liabilities without corresponding input deduction rights, breaching neutrality—this cannot be solved through interpretation and requires legislative correction (e.g. deemed input VAT or flat-rate credit).
Source Marta Papis Almansa
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