On 11 March 2025, the European Union formally adopted the ViDA package, which aims to fundamentally modernise the common system of value added tax and effectively reduce VAT fraud in the EU through the following provisions:
- the introduction of digital reporting for Community transactions,
- formalising and extending e-invoicing,
- developing and implementing new rules for the different sales platforms,
- the establishment of one-off VAT registration.
The provisions of the package will be phased in between 2025 and 2035, covering the following main areas:
E-invoicing and digital reporting
- From 2025, Member States may make e-invoicing mandatory for domestic transactions.
- From 1 July 2030, all cross-border business-to-business (B2B) or business-to-government (B2G) transactions will be required to be e-invoiced in a standard EU format. In addition, digital reporting will become mandatory, in return for the abolition of A60 reporting.
- Full EU harmonisation is expected from 2035.
Platform economy
- The rules on online platforms would also be amended from 1 July 2028. As regards the taxation of platforms, the most significant change concerns exempt providers: if someone offers accommodation through Airbnb or Booking and has opted for an exemption, the intermediary fee charged by Airbnb/Booking will also be exempt, thus sparing the accommodation provider administrative and tax obligations.
- Platforms that qualify as small or medium-sized enterprises under EU rules will not be subject to tax.
- The place of delivery for B2C facilitation services on the platforms will be where the basic service is provided. Customers who do not provide VAT identification will automatically be treated as non-taxable persons.
- In some cases, platforms offering passenger transport and accommodation (e.g. Uber, Airbnb) become liable for VAT as a deemed VAT payer. However, they do not have to pay VAT if the actual service provider provides a valid VAT number and declares that it will account for the VAT itself. The rule mainly applies in cases where the original supplier would not be liable for VAT. Member States may postpone the introduction of the rule until 1 January 2030.
Single VAT registration
- Expansion of the One Stop Shop (OSS) (from 1 July 2028): the Simplified VAT declaration (OSS) for intra-EU supplies by traders to private individuals (B2C) will be extended to new services, such as electricity, natural gas, installation contracts and certain domestic supplies.
- Energy supply (from 1 January 2027): the OSS will be extended to energy supply (e.g. charging electric vehicles in another Member State).
- Movement of own goods (from 1 July 2028): a new OSS module is available for the movement of own goods within the EU - avoiding the need to register for VAT in the country of destination.
- Reverse charge (B2B): member states will be obliged to apply reverse charge if the seller is not registered but the buyer is - this will reduce the registration obligation for foreign companies.
- Live streaming and virtual events: from 1 January 2025, new rules for determining the place of performance for B2C will follow the rules for electronic services.
Although the new rules reduce the need for foreign VAT administrations, they do not eliminate them completely. For example, a non-established vendor will still have to register in the Member State from which he makes a Community supply.
However, the lack of registration can lead to cash flow disadvantages, as input VAT can only be reclaimed through a foreign VAT refund procedure.
While many of the regulatory changes will not take effect for years, given that the improvements required by the ViDA will require major financial and technological overhauls, it is advisable to start reviewing business processes, improving IT systems and assessing the legal environment now so that companies do not risk future fines or operational disruption.
The tax experts of Moore Hungary Tax Advisory Kft. are ready to answer your tax questions related to the implementation of the VIDA package. Contact us with confidence!
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