New Council of EU president plays down expectations on quick agreement on ViDA reforms; deep political issue add to likely delays
The incoming rotating president of the Council of the EU, Hungary, is set to make little progress in resolving last disagreements on the EU VAT in the Digital Age reforms.
This situation is further complicated by political disagreements between Hungary and most of the rest of the EU. Several Nordic EU members have said this week they will boycott Council of the EU meetings in Budapest during the Hungarian presidency.
The previous presidency of Belgium, which ended on 30 June 2024, had devoted significant energies to find a compromise on the outstand pillar of ViDA, Digital Platforms. But was blocked for a second time by Estonia at ECOFIN in June.
Hungary has made no reference in its programme for priorities of the Council to completing ViDA EU political agreement. Indeed, VAT receives no attention. Hungary has informed other EU member states that it does not expect to achieve agreement on any of the proposals left open by the Belgian presidency and that it would instead issue a progress report at the end of its six-month term. However, others have said an agreement may come by October or November.
Nevertheless, since the other two of three pillars of ViDA were approved at May’s ECOFIN, progress will start on them. Pillar 3, Single VAT Registration, is already underway with a Fiscalis workshop last month.
Hungary has also confirmed it will make no progress on the Energy Taxation Directive during its presidency.
As the first presidency in this new 5-year cycle of the EU Commission and Parliament, it is typical that limited new agreements are made.
Progress on 2028 Customs reforms
But Hungary is keen to maintain momentum in the 2028 EU Customs reforms, which includes IOSS reforms.
EU VAT in the Digital Age reforms
| EU VAT in the Digital Age | |
| 3 pillars to improve efficiency of VAT for all and reduce fraud | |
| 1. Digital Reporting Requirements; e-invoicing | 2030-35: Mandatory digital reporting of intra-community transactions; obligation to be able to issue and receive intra-community e-invoices; member states free to impose own e-invoicing or real-time reporting but most conform to EU e-invoice standard EN 16931 |
| Read more about EU Digital Reporting Requirements (DRR) | |
| Structured e-invoices mandated for intra-community supplies | |
| EC Sales lists replaced by Digital Reporting Requirements | |
| Withdrawal of EU permission requirements for e-invoicing | |
| 2 Platform economy | July 2027: Travel & accommodation sharing platforms to become deemed supplier / liable to users' VAT. New definitions of the roles of providers, users and platforms to avoid double and no-taxation |
| Read more - Travel & accommodation platforms deemed suppliers for EU VAT | |
| 3 Single VAT Registration; extension of OSS | July 2027: Following the 1 July 2021 introduction of the One Stop-Shop (OSS), extended to cover movement of own stocks prior to cross-border B2C to reduce the foreign, non-resident VAT registrations & returns. Plus to movements of own stock with ending of 'call-off' stock burden |
| More details on Single VAT Registration in the EU | |
| Call-off stock VAT simplification ends | |
| Harmonisation of B2B Reverse Charge rules | |
