EU Platform Economy 2025 deemed supplier – VAT in the Digital Age

Type: Draft Legislation

One of the three pillars of the EU’s VAT in the Digital Age package, the new Platform Economy VAT collection’s role for the leading travel and accommodation platforms will be responsible for collecting and remitting VAT on behalf of the vehicle and home sharing on their marketplaces. 

• Extension of the deemed supplier VAT requirements to short-term accommodation and transport economies platforms which accounts for over 70% of the platform economy when goods are excluded (so gig & sharing economies). 
• This ensures significant market distortions for traditional hotel and taxi operators who are required to charge VAT today, and so ensure a level playing field between traditional and digital channels. 
• This will generate an estimated €6bn per annum, or €66 billion in VAT for member states between 2023-32. 
• In the future, other sectors of the gig & sharing economies might be incorporated. These include professional and manual services, ‘click work’, crowdfunding and P2P lending.  However, the VAT and difficulties with small entrepreneurs operating in these areas mean this will happen at a later date. 

These measures will save approximately €480 million per annum. 

Effective date: 2025

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