![VAT in the digital age [EU Legislation in Progress]](https://i0.wp.com/epthinktank.eu/wp-content/uploads/2023/03/EPRS-Briefing-739371-VAT-Digital-Age-FINAL.png?fit=866%2C367&ssl=1)
Written by Pieter Baert (1st edition).
Value added tax (VAT) is one of the key revenue raisers in national budgets, representing on average almost one-fifth of all tax revenue collected in the European Union (EU). To help strengthen the fight against VAT fraud and reduce the administrative burden for businesses, the European Commission tabled a three-part initiative – VAT in the Digital Age – on 8 December 2022.
As a first objective, the Commission proposes to introduce an EU-wide reporting system on intra-EU business-to-business (B2B) transactions, whereby companies would share, in real-time, data drawn from electronic invoices with the authorities. This would allow Member States to keep a close eye on the trail of VAT collected and to intervene when there is suspicion of fraudulent practices. Second, the European Commission proposes to introduce a harmonised framework for charging VAT in passenger transport and short-term accommodation platforms. Lastly, the initiative proposes measures to lower VAT compliance costs for companies operating across borders.
For the proposal to become a directive, the Council needs to vote on it with unanimity, after having consulted the European Parliament and the European Economic and Social Committee.
Versions
- February 2023: VAT in the digital age (1st edition)
| Proposal for a Council directive amending Directive 2006/112/EC as regards VAT rules for the digital age |
| Committee responsible: | Economic and Monetary Affairs (ECON) | COM(2022) 701 08.12.2022 |
| Rapporteur: | Olivier Chastel (Renew, Belgium) | 2022/0407(CNS) |
| Shadow rapporteurs: | Lidia Pereira (EPP, Portugal) Aurore Lalucq (S&D, France) Mikuláš Peksa (Greens/EFA, Czechia) Andżelika Anna Możdżanowska) | Consultation procedure (CNS) – Parliament adopts a non-binding opinion |
| Next steps expected: National parliaments’ opinions |
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[…] European Parliamentary Research Service has set out some of the issues in the EU VAT in the Digital Age reforms issued by the European Commission on 8 December 2022. […]