ViDA Update
3 July 2024| CATEGORIES: Digital Reporting Requirements, e-invoicing, EU VAT, Platform economy, Single VAT registration, VIDA| TAGS: digital reporting requirements, e-invoicing, ECOFIN, EU, platform economy, single VAT registration
Further to our blog article published last month, agreement on the revised ViDA proposals was not achieved at the meeting of the EU’s Economic and Financial Affairs Council (ECOFIN) held on 21 June 2024.
Progress to date
The European Commission released the initial ViDA proposals in December 2022, and a revised text was published on 8 May 2024. Agreement was not reached on all three Pillars at the ECOFIN meeting on 14 May 2024, and so the issue was considered again at the 21 June ECOFIN meeting.
It had been hoped that full agreement would be reached under the Belgian Presidency which ended on 30 June 2024. Discussions will resume at the next ECOFIN meeting on 14 July 2024 under the Hungarian Presidency.
Outstanding issues
The measures for Pillars 1 and 3 (Digital Reporting and e-invoicing and the Single VAT Registration) were agreed at the May meeting. However, Estonia has not yet agreed to the compromise proposals put forward for Pillar 2 for Digital Platform ‘deemed suppliers’.
Estonia remains concerned that the mandatory requirement for platforms to account for VAT when facilitating the supply of short-term accommodation rental or passenger transport services by third-party businesses would undermine neutrality and adversely affect smaller businesses that are below the VAT registration threshold. The compromise proposed by the Belgian Presidency was to change this deemed supplier obligation to allow Member States to opt out small and medium-sized enterprises (SMEs) from the provision. However, this has not yet been accepted by Estonia.
This stance blocks the implementation of all pillars as the ViDA proposal is not broken down into separate elements and can only be voted on as a whole.
In view of the delays to the ViDA package, many Member States have already introduced, or are in the process of introducing, domestic e-invoicing and e-reporting which businesses need to ensure they can comply with in the meantime.