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16 November 20234 minute read

VAT in the Digital Age (ViDA) – The revolution is unfolding

Almost a year following a proposal from the European Commission, the European Parliament released a report on 31 October 2023, outlining proposed amendments to the proposals published on 8 December 2022 and changes to the timetable.

As a reminder, the directive proposal1 (the Proposal), in conjunction with the corresponding implementing regulations, would introduce a set of measures under the VAT in Digital Age (ViDA) initiative2. The measures are articulated around three main pillars and include, in particular:

  • Mandatory e-invoicing for intra-community business-to-business (B2B) transactions, and, for business-to-consumer (B2C) transactions, the flexibility for suppliers to opt for e-invoicing without necessitating customer approval;
  • a near-real-time reporting system for intra-community B2B transactions;
  • the broadening of "deemed supplier" rules, so far applicable to specific sales of goods made through online platforms, to now include all types of supplies of goods, as well as short-term accommodations, and passenger transport facilitated through such platforms; and
  • a single VAT registration system with a comprehensive One Stop-Shop (OSS) mechanism covering all cross-border B2C transactions and, in due course, B2B transactions.

The proposed amendments by the European Parliament primarily aim to ensure that the rules outlined in the Proposal are clear and proportionate. Their purpose is to facilitate a fair and efficient collection of VAT in a dynamically evolving market, emphasising the importance of providing taxpayers with clear guidance and avoiding impractical obligations.

The amendments also underscore the significance of considering data and consumer protection as crucial elements in the legislative process. The most illustrative examples of these considerations are detailed below.


Main Proposed Amendments
  • The Parliament recommends extending the compulsory e-invoice issuance deadline to eight working days, as opposed to the Commission's initial proposal of two working days.
  • Regarding near-real-time reporting, the Parliament suggests extending the original deadline of two working days from the invoice issuance date to five working days from the related accounting entry.
  • Although the new e-invoicing and near-real-time reporting measures were initially stated to take effect in 2028, the Parliament advocate for a more gradual implementation, which indicates a probable extension of this deadline by at least one year.
  • The deemed supplier rules are proposed to enter in force in 2026 as opposed to 2025 as initially planned. The Parliament also introduces the notion of ‘good faith’ for platform operators. Deemed suppliers may not be held liable in cases where the underlying supplier deliberately concealed their VAT status.
  • The Parliament further recommends granting an exemption from the deemed supplier rule for small or non-profit-making undertakings, as well as for supplies not subject to VAT if not facilitated through an electronic platform. Additionally, the deemed supplier rules pertaining to transport, short-term accommodations, and second-hand goods must, according to the European Parliament, be thoroughly reassessed, considering the practical challenges inherent in these particular sectors.
  • The Parliament recommends further studies to ensure that a single VAT registration system with a generalised one-stop shop is sufficiently robust to avoid VAT fraud.



In its report, the European Parliament appears to have addressed several concerns raised after the European Commission's publication at the end of 2022. The Parliament advocates for rules that maintain proportionality, i.e. ensuring adequate VAT revenue collection for Member States without becoming impractical or excessively burdensome for businesses, particularly smaller enterprises.

Furthermore, recognising the importance of a fair legislative framework for VAT in the Digital Age, the Parliament acknowledges that a hurried implementation is likely to result in chaos. This is why the deadlines initially proposed by the European Commission should be extended by at least one year.

It remains to be seen what the European Council’s opinion will be and whether it will adopt or not the latest proposal as it stands.

1Proposal for a COUNCIL DIRECTIVE amending Directive 2006/112/EC as regards VAT rules for the digital age COM/2022/701 final
2Please refer to our previous publication: VAT in the Digital Age (ViDA) – A revolution is underway