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Adopted text

VAT: rules for the digital age

TA-9-2023-0421 · P9_TA(2023)0421 · PE746.900

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Parliament's amended version of the proposed directive updates EU VAT rules for the digital age, covering digital reporting, electronic invoicing, and platform economy rules. It aims to reduce VAT fraud and compliance costs, especially for SMEs, while respecting privacy and proportionality. The text sets new deadlines for electronic invoicing and reporting, adjusts the deemed supplier model for platforms, and extends one-stop shop schemes.

Key points

  1. New VAT obligations should be simple, clear, effective and balanced for businesses and authorities, respecting proportionality.
  2. Personal data processing must respect privacy and data protection laws; information collected should only be used to combat fraud.
  3. The Commission should ensure taxpayers' rights are respected when tax authorities use vast data and algorithmic analysis.
  4. Electronic invoicing becomes the default for cross-border transactions from 1 January 2028, without requiring recipient acceptance.
  5. Invoices for cross-border supplies must be issued within eight working days after the chargeable event.
  6. Digital reporting data must be transmitted within three working days after the posting date in accounting books.
  7. The deemed supplier model applies to platforms facilitating short-term accommodation rental and passenger transport by road, with exemptions for small platforms and certain supplies.
  8. The reverse charge mechanism becomes mandatory when the supplier is not identified for VAT in the member state where VAT is due, but non-established businesses may still register locally.
  9. Call-off stock arrangements end on 31 December 2026, with new arrangements not possible after 31 December 2025.
  10. The Commission must report on the one-stop shop by 31 December 2024, exploring extensions to cover more transactions.

Who is affected

  • Platforms facilitating short-term accommodation and passenger transport: must charge and account for VAT under the deemed supplier model, with exemptions for small platforms.
  • Businesses, especially SMEs and micro-undertakings: face new digital reporting and e-invoicing obligations, but with simplified options and later application dates.
  • Tax authorities: receive more transaction data and must provide electronic means for reporting, while ensuring data protection and training for staff.
  • Taxable dealers under margin scheme: can use the Union OSS for domestic supplies of margin scheme goods.

Figures and deadlines

  • 1 January 2028: electronic invoicing becomes default without recipient acceptance.
  • Eight working days: deadline for issuing invoices for cross-border transactions.
  • Three working days: deadline for transmitting digital reporting data.
  • 31 December 2025: end date for new call-off stock arrangements; 31 December 2026: arrangements cease.
  • 31 December 2024: Commission report on one-stop shop due.
  • 1 January 2025: application for companies with more than 250 employees; 1 January 2026 for others.

Legal basis: Article 113 of the Treaty on the Functioning of the European Union