The European Council recently announced a significant agreement to update EU VAT rules to adapt them to the digital age, with the aim of combating tax fraud and supporting the digital transformation of businesses. A legislative package has been finalized introducing new rules on electronic invoicing and data reporting, with a particular focus on activities conducted via digital platforms.
### New digital VAT obligations
By 2030, all VAT reporting requirements for cross-border transactions will be fully digitalized. This step will have a significant impact on online platforms, which will be required to pay VAT on short-term accommodation and passenger transport services in most cases where individual service providers do not charge VAT. This change aims to ensure greater fairness among various service providers and prevent tax revenue losses.
Additionally, there will be an expansion and improvement of online one-stop shops, further simplifying the VAT filing process for businesses operating cross-border.
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### Interoperability of electronic invoices
Another key element of the agreement concerns the introduction of a real-time digital declaration system using electronic invoices. The goal is to have an EU system operational by 2030, with the addition of a crucial requirement: all existing national systems must become interoperable by 2035. This step will ensure greater harmonization between the various EU member states and facilitate the management of international transactions.
Improvements in the interoperability of electronic invoicing systems are intended to further reduce the risk of tax fraud and encourage greater transparency among businesses operating in the single market. These changes represent a practical response to the growing need to adapt tax legislation to new economic and technological realities.
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