EU: New Electronic VAT Exemption Certificate

The European Commission (EC) invited all interested parties to share their opinions on proposed amendments to the EU VAT Directive and the EU VAT Implementing Regulation concerning the electronic version of the VAT exemption certificate by September 13, 2024.

With these amendments, the EC aims to replace hand-signed paper forms with electronic ones, thus making further changes toward establishing an EU VAT system more suitable for the digital age.

Impact of the Amendments

Once the amendments are adopted, EU Member States will have until June 30, 2026, to implement the new rules into their national legislation. Still, the paper version of the VAT exemption certificate will remain an option during a transition period until June 30, 2030.

Electronic VAT exemption certificates will be required for transactions that qualify as exempt under Article 151 (1) of the EU VAT Directive, which refers to the supply of goods and services by diplomatic and consular agreements or to recognized international bodies, as well as supply of goods and services for EU Member States and NATO armed forces.

The amendment proposal also includes technical details and specifications for implementing digital VAT exemption certificates and information on the certificate format and electronic processing requirements. The amendments propose using the PDF e-form submitted electronically and signed by advanced electronic signatures. 

Both domestic and cross-border transactions will be subject to electronic VAT exemption certificates. 

Conclusion

The proposal to make these amendments aligns with the ongoing process of digitizing EU VAT legislation and removing outdated forms and procedures, such as hand-signed paper forms, from use. As EU Member States work hard towards adopting the ViDA package, amendments like this are valuable steps towards modernizing the EU tax system and making it more efficient and effective.

All interested parties should share their comments on this change since the feedback received from the public will be shared with the European Parliament and the Council.

Source: European Commission - Directorate-General for Taxation and Customs Union, EU VAT Directive