EU VAT in the digital age on the three pillars of reform will not lead to final agreement by EU finance ministers this year, as planned. This means that the work underway to reach final solutions and implementation dates in the Council of the EU shifts from the current Spanish Presidency to the Belgian Presidency. Ultimately, it is planned to conclude discussions in 2024.
Pillar commissioning can now proceed as follows:
- Pillar 1 - digital reporting requirements and e-invoicing, implementation date moved from 2028 to 2030 or even 2032. This pillar requires more technical discussions and agreements. Introduces mandatory structured VAT e-invoicing for suppliers and digital reporting of intra-Community B2B transactions by suppliers and customers. Member States may impose separate e-invoicing or digital reporting for domestic transactions, including pre-clearance controls.
- Pillar 2, the Platform Economy (deemed supplier), still requires numerous agreements to be worked out at ministerial levels. This is likely to result in a delay of one year, until 2026. Under this pillar, the collection of VAT (deemed supplier) is shifted to platforms and ride-sharing intermediaries.
- Pillar 3, or single VAT registration - there is full agreement here. It relates again to a possible delay in implementation from 2025 to 2026. This pillar includes the extension of the single OSS VAT return for e-commerce and certain cross-border B2B flows of goods, and the harmonisation of non-resident VAT reverse charge provisions.
On 23 October, the ECON committee of the European Parliament voted in favour of a one-year delay of all 3 pillars of the ViDA. However, this is not binding, but certainly reflects concerns that businesses and tax authorities will not be ready for Pillars 2 and 3 by 2025.