On March 11, the European Union adopted the Package “VAT in the digital age” (life)a series of Reforms destined to modernize and digitize the Value Added Tax System (VAT) in the EU. These measures seek to improve the efficiency in fiscal collection and adapt to the challenges of the digital economy.
In this article we review the main changes and their implementation dates.
Electronic billing and digital notification requirements
From the entry into force of the package (that is, already), the EU member states may implement the mandatory electronic billing for national transactions B2B and B2C without the need for prior authorization of the European Commission, provided that these measures are limited to the taxpayers established in their territory.
From July 1, 2030electronic billing will be mandatory for intra -community B2B transactions (that is, among companies from different EU countries). In addition, this obligation will also apply to those operations in which the mechanism of Investment of the taxpayer. This mechanism is used when the responsible for paying VAT is not the seller, but the buyer (as in some sectors where it seeks to avoid tax fraud).
In practical terms, this means that:
Any invoice between companies within the EU must be generated and transmitted electronically in a standardized format. In certain cases in which the buyer assumes the responsibility of VAT (instead of the seller), it will also be mandatory to issue the invoice electronically.
Registered companies for VAT purposes must issue structured electronic invoices in a standard EU format within 10 days after the supply of the good or service (or to the payment, if this occurs before).
Before January 1, 2035national electronic billing systems before 2024 must be completely harmonized with EU standards.
How was before
Previously, recapitulative statements of cross -border sales were made monthly or quarterly, which generated delays that could be used to commit fraud. As explained María Elena ScoppioDirector of Indirect Taxation and Tax Administration, “with life, sales and cross -border purchases will be registered almost in real time, and the data will be automatically sent to the tax administrations, improving the capacity for detection and response to fraudulent activities.”
Changes in transport and accommodation platforms
From July 1, 2028 (voluntary phase) and of January 1, 2030 (mandatory)digital platforms that facilitate rental services of short -term accommodations and passenger transport will be considered responsible for collect and send VAT in certain transactionsfor example, because they are individual suppliers or small businesses that are not obliged to register for VAT purposes. This seeks to guarantee equitable competition with traditional suppliers.
Single VAT record for cross -border sales
From the January 1, 2027 The Single window system (OSS) and the Unique import window system (iOSS) so that companies that sell to consumers throughout the EU can register only once for the purposes of VAT and fulfill their obligations throughout the Union. This measure seeks to significantly reduce administrative burden and compliance costs for companies operating in multiple member states with less procedures.
Why these changes have been approved
To contextualize the approval of these new measures, from the European Commission they explain that in 2020, the EU countries lost approximately 99,000 million euros in VAT revenues, of which it is estimated that a quarter was due directly to fraud related to intra -community trade.
In addition, they ensure that current VAT provisions can be complex and cumbersome for companies, especially for small and medium enterprises, and those that operate at the cross -border level. Official agencies expect the key actions proposed in life to help EU countries raise up to 18,000 million euros more in VAT income annuallyof which 11,000 million would come from anti -fraud measures.
On the other hand, the new measures Administrative and compliance costs will decrease for EU merchants to more than 4,100 million euros per year for the next ten years. In addition, it guarantees that, over time, existing national systems converge in the entire EU and pave the way for countries that wish to introduce national digital notification systems for national trade they can do so.
Photo: European Commission
