ViDA: Third Pillar – Single VAT Registration

Single VAT Registration is the last of the pillars introduced under the ViDA package, although it will be the first to come into force – from 1 July 2028 – ahead of the other two pillars (Digital Reporting Requirements and Platform Economy).

The purpose of these changes is to reduce the need for taxpayers to register as active VAT taxpayers in every country where they make sales, and thus to reduce the administrative burden related to handling settlements in different Member States.

OSS – extension of application

The first solution aimed at achieving this goal is the extension of the One Stop Shop (OSS) procedure. Currently, OSS applies to the provision of services to consumers as well as intra-EU distance sales of goods – that is, where the place of taxation is the country of consumption, which involves the need to account for local VAT.

Once the changes on Single VAT Registration enter into force, the OSS procedure will also apply to:

• supplies of goods with installation or assembly,
• supplies of goods on board ships, aircraft or trains,
• supplies of gas, electricity, heating and cooling,
• selected domestic supplies.

These changes should be positively assessed, as the extension of OSS is a natural and anticipated development of the current mechanism. Moreover, the current rules have led to some paradoxical situations – for example, the construction of a building could be settled via OSS, while the delivery of equipment requiring on-site installation required registration in the country of delivery.

End of the call-off stock mechanism

Importantly, the OSS procedure will also cover the transfer of own goods, which means that the call-off stock mechanism will become obsolete. This will eliminate the need for registration in the country to which goods are being transferred. This is a particularly important change for many taxpayers moving goods within the EU without selling them (e.g. to warehouses).

Harmonisation of domestic reverse charge

Another simplification will be the harmonisation of domestic reverse charge rules. Currently, the VAT Directive allows Member States to apply reverse charge to supplies of goods and services made by taxpayers not established in their territory. However, different countries have used this option to varying extents, which requires taxpayers to verify local rules on a case-by-case basis. Where the reverse charge is not allowed, VAT registration becomes necessary.

The ViDA changes will make a significant shift in this area. The general rule will be that reverse charge applies to supplies of goods and services made by taxpayers who are not established and not VAT-registered in the Member State where VAT is due, provided the customer is a VAT-registered taxpayer in that country.

Summary

The planned changes under the ViDA package regarding Single VAT Registration represent a step towards simplifying and modernising the VAT system in the EU. The new rules – including the expansion of the OSS procedure, the removal of the call-off stock mechanism, and the harmonisation of reverse charge rules – will significantly reduce the need for local VAT registrations. These long-awaited, positive changes will enhance business flexibility within the EU internal market, support cross-border trade, and reduce administrative burdens for taxpayers.