During the latest ECOFIN meeting on 21 June, Member States met to discuss if they could come to an agreement to implement the VAT in the Digital Age (ViDA) proposals. At the ECOFIN meeting in May, Estonia objected to the platform rules being proposed, instead requesting to make the new deemed supplier rules optional (an opt-in), allowing Member States to choose whether to implement them in their national VAT legislation or not.
In today’s meeting a new compromise text was proposed. The compromise text meant that there would be an opt in for the new deemed supplier rules but for SME businesses. Whilst 26 Member States and the commission came to an agreement on this, Estonia could not support the new compromise due to the fact there was no substantial changes since the last meeting and their objections remained. It will now be up to the Hungarian presidency to seek agreement on the proposals, during the second semester of 2024.
As a reminder of what will occur, and the intended dates of implementation please refer to our previous blog, What’s Happening Next with VAT in the Digital Age (ViDA).
Remind me, what is VAT in the Digital Age (ViDA)?
Simply put, ViDA is a proposal that will enable EU countries to use technology to improve the current VAT system and better prevent fraud. The updates include facilitation of e-invoicing, introduction of mandatory digital reporting requirements of cross-border transactions and legal mechanisms to facilitate cross-border business and compliance. When enacted, this will mean significant changes to how you operate in these countries.
As expected, changes of this size and scope are generating a lot of questions among businesses that conduct operations in the EU. Everything from process costs to technology needs is being evaluated as more information on ViDA becomes available.
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