VAT in the Digital Age (ViDA) package NOT approved

VAT in the Digital Age (ViDA) package NOT approved: ECOFIN council cannot find agreement

At this week’s ECOFIN council meeting, the hoped for agreement of the VAT in the Digital age (ViDA) proposal was not reached; after Estonia maintained its objection to use of the ‘deemed supplier’ rules for platform economy in the taxi & accommodation sectors.

Despite comprises to this area of the ViDA package, the Estonian finance minister held that the deemed supplier model would impinge on the principles of VAT neutrality for SME’s who work with platforms within the aforementioned sectors. The Estonian minister suggested a further compromise to make this rule optional for EU member states, though it appears that other EU member states do not agree with the optionality clause due to concerns with distortion of competition between traders in different EU member states. All other areas of the amended ViDA proposal (published 8th May) therefore appear to have consensus, and will be within the ViDA package upon its approval.

Discussions will therefore continue to try and find a way forward on this final remaining point, with the ECOFIN council hopeful that an agreement can reached within the coming weeks, and before the end of the Belgian presidency.