EU- An Overview of Recent ViDA Developments

The European Union institutions, recognizing the significance of the VAT in the Digital Age (ViDA) package, have dedicated years to its scope and adoption. The anticipation was high that this year would mark a significant milestone, with all EU countries agreeing on the scope and implementation timeline of this crucial VAT EU-wide reform package.

However, this did not happen, and the ViDA proposal is still a matter of negotiation and agreement between EU Member States. With Hungary's new presidency of the EU Council, whether or not the ViDA package will be adopted depends on its efforts.

Recent Developments and Future Steps

The Estonian Minister of Finance has been a critical figure in the ViDA proposal's journey, having blocked its adoption at two previous ECOFIN meetings. The main point of contention is introducing the ‘deemed supplier’ rule for transport and accommodation platforms.

While the current proposal makes this obligatory for all EU Member States to implement in their national legislatures, Estonia argued that it should be optional.

With this, the Belgian presidency of the EU Council ended on June 30, 2024, and the question of when the ViDA package would be adopted was transferred to Hungary. Although there was not much information about ViDA in the Presidency work program, the Hungarian Minister of Finance (MoF), Mihály Varga, assured that ViDA, as an essential legislation, would be a priority.

In the meantime, specific revisions have been made to the ViDA package, and the European Parliament adopted three legislative resolutions related to ViDA. These resolutions amend some key provisions regarding the VAT reporting obligations, e-invoicing implementation timeline, potential consolidation of all three OSS Schemes, and administrative cooperation at the EU level to fight VAT frauds.

However, the Council of the EU has yet to make a statement on these resolutions. The opinions of the European Commission and the national parliaments will also be considered before deciding on the final version of these resolutions.

Conclusion

EU Member States and institutions have invested considerable effort and time in drafting, discussing, and trying to find common ground for adopting the ViDA package. Of course, additional changes and revisions are expected in this process.

Although there is still no date when ViDA will be discussed at the ECOFIN meeting, based on all previous statements made by Ministers of Finance of EU countries, we can be sure that work on ViDA will continue and that the main question is when, not if, it will be adopted.

Source: VATabout - EU - Future of the VAT in the Digital Age Package Remains Uncertain, VATabout -EU - Hungary Faces Uncertainty in Advancing VAT in Digital Age Package Amid EU Presidency Transition, VATabout - EU: European Parliament Approves Resolutions Related to the ViDA, European Commission