COMMISSION CALL FOR FEEDBACK ON PLANS TO BRING THE EU VAT RULES INTO THE DIGITAL AGE
On 21 January, the European Commission launched a public consultation ahead of a new legislative package later this year to adapt the way VAT is reported and collected in an increasingly digital world. The consultation seeks feedback from, among others, business federations, trade associations, companies, international organisations, national tax and customs authorities, brokers, and tax advisers. The call for feedback is open until 15 April 2022 and responses can be submitted in any official EU language.
The Commission has committed itself to adapting the EU VAT framework to the digital sphere. Specific initiatives include: modernising VAT reporting obligations and considering the possibility of further extending e-invoicing; adapting the VAT treatment of the “platform economy” so that it fits the new developments in this area; and facilitating VAT registration and compliance, including a revision of the existing rules requiring the registration of non-established taxpayers, the One-Stop-Shop (OSS) and the Import One-Stop-Shop (IOSS). The single VAT registration in the EU is an ongoing process linked to the changes introduced on 1 July 2021 for e-commerce, thus needing an evaluation.
The Commission argues that all three elements will reduce the administrative burdens for businesses in complying with their VAT obligations and help Member States fight fraud. The time needed for Member States and businesses to implement any IT system will be carefully assessed, notably in relation to digital reporting requirements which might require a longer implementation period. The full implementation of digital reporting requirements might therefore run until 2030 but will depend on the level of centralisation of the IT infrastructure to be built.
The consultation seeks stakeholders’ views on whether the current VAT rules are adapted to the digital age, and on how digital technology can be used both to help Member States fight VAT fraud and to benefit businesses. Views are sought on VAT reporting obligations and e-invoicing; the VAT treatment of the platform economy; and the use of a single EU VAT registration.
Source: European Commission