DPH v digitálním věku (ViDA) – jaký je aktuální stav reformy?

VAT in the digital age (ViDA) - what is the current status of the reform?

The original proposal for VAT reform in the digital age from December 2022 (we informed you e.g. HERE) has undergone many changes. However, the approval and implementation of the new rules has been delayed for now. Finance and economy ministers have not yet agreed on some key parameters during the ECOFIN meeting. Discussions will continue (now under the Hungarian presidency) with the aim of reaching a consensus of all 27 EU member states. The next informal ministerial meeting is expected to take place on 13-14 September 2024, with the official ECOFIN Council meeting on 8 October 2024.

A short summary of the changes. The ViDA reform is based on three pillars of change with staged implementation dates. The first pillar introduces a new digital reporting (DRR) and mandatory electronic invoicing for intra-community transactions. The second pillar reforms the collection of VAT on digital platforms for short-term accommodation and passenger transport services, introducing the notion of a 'deemed supplier'. The third pillar aims to reduce the obligation to register for VAT in another Member State by extending the scope of the special one-stop-shop scheme and the wider application of the reverse charge scheme to established/registered customers. The individual pillars should be implemented gradually from 2027 (Pillars 2 and 3) to 2030 (Pillar 1). The timeframe is rather indicative, further postponement of the effective date cannot be excluded, depending on the ability of Member States to reach a compromise.

For businesses operating in the EU market, it will be crucial to understand how this reform will affect their business. In particular, critical changes await them in the area of billing processes and reporting obligations. For some of them, it opens the way to reduce the number of their registrations across Member States. Although the changes under ViDA are intended to harmonise and simplify the rules, it is clear that there will be (at least in the medium term) further fragmentation of the rules between Member States. The extension of the special OSS regime offers advantages, but it also has its limits. In many cases it may be more advantageous for companies to maintain registrations in different Member States.

If you have any questions, please contact the author of this article or EY team you are working with.

Author:

Ivana Krylová