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The ViDA Package is designed to facilitate the EU's digital transition, bolster cross-border trade, and tackle VAT fraud. It encompasses amendments to three key EU legislations:  The package's three primary goals are to expand the VAT digital platform rules, introduce a single VAT registration and compliance mechanism, and implement a new real-time digital reporting system based on e-invoicing for cross-border businesses within the EU.

(i) Digital Reporting Requirements (DRR) – These proposals are designed to update VAT reporting duties by implementing digital reporting requirements. This will standardize the data taxpayers must submit for each transaction in an electronic format to tax authorities and mandate e-invoicing for cross-border transactions.

(ii) Platform economy – The proposals aim to tackle the challenges within the platform economy by revising VAT regulations to clarify the rules on the place of supply for these transactions and to enhance the role of platforms in VAT collection when they enable the provision of short-term accommodation rentals or passenger transport services.

(iii) Single VAT registration – The proposals intend to eliminate the necessity for multiple VAT registrations across the EU by enhancing and broadening the current One-Stop Shop (OSS) / Import One-Stop Shop (IOSS) systems and applying reverse charge mechanisms, thereby reducing the circumstances that compel a taxpayer to register in multiple Member States.

The Digital Reporting Requirements (DRR) and the single VAT registration initiatives have been approved by ECOFIN. However, the platform economy proposals did not receive approval due to Estonia's veto against the 'deemed supplier' rules in the transport and accommodation sectors of the platform economy. Estonia has expressed concerns about the impact of the deemed reseller rule on small and medium-sized enterprises (SMEs) and has suggested making the platform pillar optional for Member States, allowing them to opt-in. In response, the Belgian Presidency has offered a compromise, giving Member States the choice to exempt SMEs from the deemed supplier regime. Nonetheless, Estonia continues to oppose this compromise.

The Council has affirmed its commitment to reaching an agreement, with discussions set to continue at the next ECOFIN meeting on 21 June 2024. With the formation of a new European Parliament following the June elections, the ViDA Package faces considerable time constraints. Achieving consensus is challenging due to the requirement for unanimity, especially when national interests are at stake. Despite these challenges, the Belgian Presidency has declared its determination to finalize an agreement on the ViDA Package before its term concludes in June.

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