Insights

European Council Approves ‘VAT in the Digital Age’ Package

Henna Jovio 22 Nov 2024

An overview by Borenius and Flick Gocke Schaumburg, Taxand Finland and Germany

The Council of the European Union has recently agreed on the “VAT in the Digital Age” package, which aims to update the EU’s VAT rules to better fit the digital economy, reduce VAT fraud, support businesses, and encourage digitalisation.

Key changes include:

• Digital Reporting and E-Invoicing (from July 2030): Cross-border VAT reporting will be fully digital, with mandatory e-invoicing for B2B transactions. Invoices must be issued within 10 days, and transactions will be auto reported to tax authorities.
• Platform Economy VAT: Online platforms must collect VAT on short-term rentals and transport if providers do not charge VAT. Exemptions may apply for SMEs.
• Expanded One-Stop Shop (OSS): Starting in 2027, OSS will simplify VAT reporting for energy and certain goods supplied by foreign entities, including a mandatory reverse charge for unregistered suppliers from July 2028.

Henna Jovio and Anna-Riikka Nummi from our Finnish member firm Borenius, along with Andreas Erdbrügger and Julian zum Bruch from our German member firm Flick Gocke Schaumburg, have both published articles providing an overview and analysis of these changes in further detail, which can be read here Borenius and here Flick Gocke Schaumburg.

Article tags

Digital Economy | Digital Tax | European | VAT