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~ Staxxer ~

VAT IN THE DIGITAL AGE (VIDA):

THE NEW RULES EXPLAINED

Text: Renee van Dal // Photos: Staxxer
On December 8, 2022, the European Commission rolled out its “VAT in the Digital Age”

(ViDA) proposal, targeting the modernisation of the EU’s value-added tax (VAT) system.
A significant part of this change revolves around digital reporting within the EU, especially
affecting B2B trade. But what changes can businesses expect between 2024 and 2028?

hy ViDA? for non-established businesses, who may choose to
The push for ViDA stems from a massive €93 register for local VAT instead.
Wbillion VAT revenue loss in 2020, as reported in
2022. A substantial chunk, approximately 25%, came from Impacts on Businesses
VAT fraud, predominantly in intra-EU trade. The current Benefits: The ViDA proposal brings some clear advantages
VAT mechanisms are cumbersome, especially for SMEs and for European businesses. The improved reporting will help
start-ups transacting across borders. ViDA’s aim? Close this combat money losses from fraud, creating a safer trading
revenue gap, potentially bringing in an additional €18 billion environment. This plan also levels the playing field, ensuring
in VAT revenue, with €11 billion expected from anti-fraud both traditional shops and online platforms have a fair chance
measures alone. in the market. With one unified VAT system, businesses can
navigate the rules easier, saving them both time and resources.
The Three Pillars of the ViDA Proposal
Real-Time Digital Reporting & E-Invoicing: Challenges: Platforms, particularly giants like Amazon, are
• From January 1, 2028, e-invoicing becomes the poised to navigate an uptick in administrative tasks as they
standard in the EU. adjust to real-time digital reporting. While the intricacies of
• The EU will establish a standardised e-invoicing how these platforms will handle VAT are yet to take form,
method. there are potential silver linings. The expanded OSS promises
• “Real-Time Digital Reporting” will replace the to streamline VAT reporting for international sellers.
existing EU Supplier Listing. Companies must Simultaneously, the introduction of the mandatory reverse
report transactions within two days post-invoicing. charge mechanism could ease administrative burdens for
• Invoicing for intra-community supplies must occur businesses operating in several EU countries.
within two days after the taxable event.
• EU nations can set digital reporting standards for What Is on the Horizon?
other transactions. EU finance ministers convened in September 2023 to
discuss the ViDA proposal. Some member states are
Updated VAT Guidelines for Platform Economy: advocating for a delay in the new rules, particularly the
• Targeting the likes of Amazon, eBay, Airbnb, and e-invoicing alterations set for 2028. Spain, currently
Uber, the European Commission will update rules presiding over the EU Council, is pushing for an affirmative
for digital platforms, holding platforms accountable vote on December 8, 2023.
for collecting and remitting VAT if users fail to.
• The intention is to ensure consistency across the Ties den Dekker, CEO of Staxxer, is not surprised by the
EU and level the competition between online and call for postponement: “The One Stop Shop as we know it
traditional services. is still in its infancy. We see that the average e-commerce
entrepreneur has not fully grasped the OSS yet, resulting
Unified VAT Registration Across the EU: in tax authorities receiving incorrect or incomplete OSS
• The aim of this policy is to simplify VAT obligations, returns. I believe we should first successfully complete phase
allowing single registrations in one Member State. one of the OSS before discussing further innovations. Give
• From 2026, call-off stock simplifications will end, it time.” ••
and the OSS will include movements of own goods
and all B2C sales, including second-hand goods
across borders.
• The use of the local reverse charge will be optional

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