Impact of EU “VAT in the Digital Age” proposals on UK/non-EU organizations

April 21, 20230

Type: Legislation

The European Commission’s “VAT in the Digital Age package” (ViDA), which was announced on December 8, 2022, aims to modernize EU VAT regulations further and change how firms report VAT (for earlier coverage, see the story in the January 2023 issue of Indirect Tax News). These changes may significantly impact the UK and other non-EU organizations that trade with and across the EU in the near future. The three main components of the ViDA proposals are: 

  • Platform economy: 

Beginning on January 1, 2025, platforms that assist the provision of short-term lodging rentals (i.e., rentals for up to 45 days) and passenger transportation in circumstances where the underlying provider does not charge VAT are expected to be subject to new presumed supplier rules. 

  • Single VAT registration: 

​Starting on January 1, 2025, the Commission recommends several adjustments to lower the cost of VAT compliance and the administrative burden on intra-EU cross-border trade. 

  • Real-time digital reporting and e-invoicing:   

As of January 1, 2028, all intracommunity B2B supplies must be invoiced electronically and comply with a two-working-day digital reporting requirement. This will assist in reducing the incidence of missing trader intracommunity VAT fraud. 

Effective date: December 8, 2022



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