VAT in the digital age

In “An Economy that Works for People”

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In its work programme for 2022, adopted on 19 October 2021, the European Commission announced that it would put forward, under the section REFIT Initiatives, sub-section "An economy that works for people", an initiative with the aim to modernise  the current VAT rules considering the opportunities offered by digital technologies. The Commission’s action plan for fair and simple taxation underlined the need to reflect on how technology can be used by tax authorities to fight tax fraud and benefit businesses, and whether the current VAT rules are adapted to doing business in the digital age. The legislative proposal shall focus on 3 main areas: 1) VAT reporting obligations and e-invoicing 2) VAT treatment of the platform economy and 3) single EU VAT registration.

The package is expected to harmonise and promote the provision of cross-border supplies in the single market, and to help improve tax collection and therefore ensure sustainable revenues during the COVID-19 recovery.

The legislative proposal, to be accompanied by an impact assessment, is expected in Q4 2022.

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Author: Pieter Baert, Members' Research Service, legislative-train@europarl.europa.eu

As of 20/11/2022.