EU: European Parliament Approves Resolutions Related to the ViDA

After Estonia vetoed the VAT in the Digital Age (ViDA) for the second time at the ECOFIN meeting, it was clear that this reform package would not be adopted during the Belgian presidency of the Council of the EU and that it would be up to the Hungarian presidency to continue this process.

While we are still waiting for the ViDA to be included in one of the next ECOFIN meetings, which is expected to happen in autumn, some progress has been made concerning ViDA. 

On July 24, 2024, the European Parliament approved three legislative resolutions, Resolution C/2024/4246, Resolution C/2024/4247, and Resolution C/2024/4248, approving and amending several aspects of the ViDA package.

Key Amendments to the ViDA Proposal

The first Resolution refers to VAT rules for the digital age. It amends many provisions concerning VAT reporting obligations,  particularly regarding compliance costs for SMEs. Furthermore, it emphasizes the importance of Intrastat as a tool for fighting VAT fraud. Additionally, it stipulates that as of January 1, 2028, e-invoicing will be the default method for documenting VAT transactions and that recipient acceptance will no longer be requested. 

Another significant provision in this Resolution is the potential consolidation of all three OSS schemes, Union, Non-Union, and IOSS, so that all supplies, such as imported goods, services, and domestic sales, are declared through a single portal.

One of the most important pieces of information this Resolution contains is that the ViDA package should be phased in as of January 1, 2025.

The second Resolution regulates VAT administrative cooperation arrangements for the digital age. One prominent amendment is that to fight fraud, the European Public Prosecutor's Office (EPPO), European Anti-Fraud Office (OLAF), and Europol will have access to VAT information on intra-community transactions.

The third Resolution refers to VAT rules for taxable persons, special schemes, and special arrangements for declaration and payment relating to distance sales of imported goods.

Conclusion

These three resolutions approved by the European Parliament are important steps in the process of adopting the ViDA package, especially considering the dates stated in Resolution C/2024/4246. It remains to be seen how the future works on the adoption of this groundbreaking reform will evolve. 

Source: Resolution C/2024/4246, Resolution C/2024/4247, Resolution C/2024/4248