EU settlement on VAT reform, Airbnb may even should pay it | EUROtoday

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The EU Ecofin Council has reached an settlement on new measures for worth added tax (VAT) within the digital age. There can be new guidelines on digital invoices and real-time information reporting, in addition to on actions carried out through digital platforms, with the purpose of combating tax fraud, supporting companies and selling digitalisation.

One of the adjustments will concern on-line platforms for short-term lodging equivalent to Airbnb and others, and platforms for passenger transport: they must pay VAT typically the place particular person service suppliers now don’t cost it.

Changes to a few completely different points of the VAT system

The EU reform features a directive, a regulation and an implementing regulation. collectively they make adjustments to a few completely different points of the VAT system. Make VAT reporting necessities for cross-border transactions utterly digital by 2030; require on-line platforms to pay VAT on short-term lodging and passenger transport providers typically the place particular person service suppliers don’t cost VAT; and enhance and increase on-line VAT one-stop retailers so that companies don’t have to hold out pricey VAT registrations in each member state by which they function.

«After nearly two years of negotiations, the Council has reached an settlement on the VAT bundle – commented the Hungarian Finance Minister Mihaly Varga, the rotating EU presidency -. This is a cornerstone for the digital transition and a major step to enhance the EU’s competitiveness. The new guidelines will replace our VAT techniques to mirror the digitalisation of our economies, assist battle VAT fraud and simplify administrative obligations for small companies and particular person service suppliers”, he concluded by thanking all delegations “for his or her constructive method and arduous work.”

The Council agreed that the EU system needs to be operational in 2030 and that each one present nationwide techniques ought to develop into interoperable with the EU system by 2035. Greater flexibility was then given in comparison with the Commission proposal by broadening the definition of short-term lodging rental for tax functions and giving member states the likelihood to exempt small and medium-sized companies from provider guidelines. More usually, in comparison with the preliminary reform proposed by the Commission in December 2022, there are a number of adjustments. The Council expressed its opinion unanimously on all three acts. The EU Parliament expressed its opinion in November 2023, however given the substantial adjustments made to the directive, the EP can be consulted once more on the agreed textual content which can then should be formally adopted by the Council earlier than being printed within the EU Official Journal and getting into into power.