The EU Council has given its final green light on a set of laws designed to make the EU’s value added tax (VAT) rules fit for the digital age.
The package adopted by EU ministers covers a directive, a regulation and an implementing regulation and brings changes to three different aspects of the VAT system.
“The EU’s VAT rules need to keep track of the digital transformation of our economies,” said Poland’s finance minister Andrzej Domanski, for the EU presidency: “This package will give the EU a competitiveness boost, help combat VAT fraud and cut the administrative burden for business.”
The directive amends directive 2006/112/EC as regards VAT rules for the digital age; the regulation amends regulation (EU) No 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital age; and the implementing regulation amends implementing regulation (EU) No 282/2011 as regards information requirements for certain VAT schemes.
The new rules will:
- make VAT reporting obligations for companies who sell goods and services to businesses in another EU member state fully digital by 2030
- require online platforms to pay VAT on short-term accommodation rentals and passenger transport services in most cases where individual service providers do not charge VAT
- improve and expand online VAT one-stop-shops so that businesses do not have to go through costly registrations for VAT in every member state in which they do business
The directive, regulation and implementing regulation all enter into force on the twentieth day following their publication in the Official Journal of the EU. While the regulations are directly applicable, the directive will have to be transposed into national law.
Value added tax in the EU (background information)
Taxation: Council agrees on VAT in the digital age package (press release, 5 November 2024)
