The EU has unblocked the reform which will force digital platforms, such as Uber, Booking or Airbnb, to pay VAT in cases where service providers do not do so. The EU Council introduced changes that weakened the original text to circumvent the veto of Estonia which, under pressure from Bolt, had opposed this legislation. Among the changes introduced, Member States have the possibility to exempt small and medium-sized enterprises (SMEs) from these regulations and the entry into force of the regulation is delayed, which will begin to be applied voluntarily in 2028 and will not be mandatory . until 2030. Spain has requested that activation can be brought forward, for which the current regulations must be repealed, as government sources explain.
Economy ministers gave the green light to the VAT package for the digital age, which also aims to promote the use of digital invoices in cross-border operations and create a single register allowing operations across the entire community bloc. But the obstacle lay in the reform which aims to oblige digital tourist accommodation or transport platforms to collect VAT to transfer it to the tax authorities when the final providers of the services (for example, drivers or apartment owners) tourists ) don’t do it. The reform will force these platforms to automatically add the tax amount to the price indicated in the offer.
Estonia blocked this reform with the increase in prices that this obligation would cause, causing “unfair competition” and a “distortion of competition”. “This is not a tax on platforms but on SMEs that provide services to a platform,” said the country’s Economy Minister, Mart Vorklaev, who proposed that the legislation be voluntary. , but the rest of the partners opposed it. The changes introduced in favor of SMEs and the reduction of bureaucracy have now allowed him to say “yes”, according to Estonian government sources.
“Under the new rules, economic platform operators will be responsible for collecting and remitting VAT, in cases where their service providers do not pay VAT themselves. The platform will collect VAT directly from the customer and send it to the tax authorities,” explains the EU Council in a statement in which it recognizes that “greater flexibility” has been granted to countries “by broadening the definition short-term rental of real estate. accommodation for tax purposes and give Member States the possibility to exempt small and medium-sized enterprises from these rules.” The European Parliament will now have to review the text as substantial changes have been implemented, including its entry into force, scheduled for 2025 and delayed by five years.
“The European Commission will need to closely monitor the way in which the exception for SMEs is applied in practice so that it does not jeopardize the principle of responsibility of platforms in the collection of VAT,” warned the Commissioner. Economy, Paolo Gentiloni.
