What’s next for VAT in Digital Age after VAT EXPERT GROUP meeting?

Following the meeting of the VAT EXPERT GROUP in Brussels on 18 March, the next steps for VAT in the digital age are becoming much clearer. The group, made up of specialised VAT experts, plays a key role in providing information and opinions on the practicalities of implementing EU tax regulations.

Three weeks after this meeting, on 11 April to be precise, a summary of the discussion was published. The agenda of the meeting covered a number of important issues, such as updates on small and medium-sized enterprises (SMEs), a guide for SMEs and a discussion of VAT after the VIDA (VAT in Digital Age) reforms.

Experts were particularly keen to hear about the progress of negotiations on the VIDA package, which aims to adapt VAT settlements to the challenges of the digital age and modernise invoicing processes. This package also introduces new obligations for digital platforms, which received a lot of attention from the audience and experts.

During the meeting, experts were informed that work on the VIDA package is ongoing, although further work is still needed on the technical aspects. There was also some welcome preliminary agreement on the concept of Single VAT Registration, which is an important part of the package.

Despite the progress, forecasts for the timing of VIDA implementation are not optimistic. The original plan was to implement the changes in 2028, but now a postponement of this date to 2030-2032 seems inevitable. This decision is due to the need to work out the technical details – it is mainly the preparation of the overall infrastructure and, of course, political decisions.

It is worth noting that The Committee on Economic and Monetary Affairs had already approved an initial one-year postponement of the change deadline for all three pillars, voting in favour of it on 23 October 2023. The Belgian Presidency is expected to seek agreement on the VIDA package at its upcoming meetings in May and June, but full implementation of the regulations will require further work and time.