ViDA adopted – for the Polish legislator there are many challenges and decisions to be taken

The ViDA package was ‘finally’ adopted

After almost two years of negotiations, an agreement was reached in the Council yesterday (5.11). The package of changes itself, which concerns not only the 2006/112 Directive as such, presented at the end of 2022, generated a lot of discussion from the beginning.

The largest part of the package – digital reporting or Pillar I – introducing the ‘EU e-invoice’ was particularly difficult for countries such as Italy and Poland, which had the most experience in this area. As a result of negotiations and the presentation of successive versions of the compromise text, agreement was reached on digital reporting. Nevertheless, Pillar II, the platform economy, was also controversial. After it seemed that a compromise had been reached on this part of the package as well, Estonia blocked the agreement in the middle of this year. Pillar III, containing many simplifications within the SVR (Single VAT Registration) framework, was less controversial than the previous two components of the ViDA package.

Despite many twists and turns and considerations around splitting the package into parts and voting separately on the individual pillars, unanimity was achieved. Thus, the ViDA itself, in the context of especially negotiations, ‘comes off the agenda’ of the Polish Presidency.

Pillars and dates

– Pillar I: July 2030. – electronic reporting and e-invoicing (all existing national systems should become interoperable with the EU system by 2035);

– Pillar II: January 2030. – Changes to the digital platform economy (voluntary from July 2028 – countries especially in southern Europe are likely to use this option). The Council provided more flexibility to Member States by broadening the definition of short-term rental accommodation for tax purposes and giving Member States the option to exclude small and medium-sized enterprises (SMEs) from the deemed supplier rules. 

– Pillar III: July 2028 -Single VAT registration

ViDA vs KSeF – possible changes

The Polish legislator, considering the adoption of the ViDA package, will have to make many decisions on how to implement certain regulations. The ViDA in many areas grants many options to Member States. With regard to the KSeF, it is probably a future decision as to whether, and to what extent, exclude the VAT deduction in case of invoices received in not structured format. This approach is already being taken by some EU countries implementing e-invoicing. Another issue is that the electronic invoices should in principle comply with the European standard. In a way, ViDA starts from the right assumption of a consistent and uniform way of invoicing across the EU based on the so-called European standard. This is a challenge for the countries, which had created and implemented their own ‘national standards/formats’ like Polish KSeF long before ViDA was even presented. The key to meeting this challenge is to ensure some kind of interoperability. Otherwise, a situation may arise where the taxpayer, in certain situations, is forced to issue and accept invoices in two different formats: the European standard and the national standard. There is still time to develop certain legislative, but above all technological solutions.