The start of November finally saw news from the EU on the progress of the VAT changes in these areas, coming from the VAT in the Digital Age plans. These changes have been the subject of discussion for years it is fair to say, and whilst some of the measures are still some distance away – in 2030, some are affecting our property-owning, travel and transport clients that will be affected by 2028 as some EU states may apply the “deemed supplier” aspects coming under ViDA earlier than others.
As a reminder, there are a range of changes covered by the ViDA plans – as a highlight these include:
- The use of a Single EU VAT registration
- Rules affecting the Platform economy (online selling of goods and services basically)
- Rules around Digital Reporting of VAT data and the use of e-invoicing
As noted an issue of impact for our UK clients will be from the Platform economy plans.
Back in 2022, we outlined the EU’s plans to bring unregistered for VAT providers of short-term accommodation rental and passenger transport by road in the EU into the VAT revenue net. You can read the details here.
Two years later, on 5 November, ECOFIN finally reached an agreement on this proposal and confirmed that from January 2030, later than was originally planned, any platforms that facilitate the sale of short-term accommodation rental of up to 30 nights to the same person, or passenger transport by road in the EU will need to comply with the new “deemed supplier” VAT rules.
The latest news confirms that the EU proposal will proceed on this basis and that the January 2030 implementation date will apply across all EU member states. However, it should also be noted that individual member states may voluntarily choose to implement the deemed supplier rules earlier than that, from July 2028.
This change is all about collecting “lost” VAT revenue from suppliers who are not VAT-registered in the EU and it will affect many of them, as well as the platforms that act for them in making their sales. There will be some exemptions for small suppliers on a member state-by-state basis and it will be essential for the detailed rules to be understood. Spain may well be one of the EU states that apply these changes from July 2028. Clients who own property in the EU which they use for holiday lets as well as our Travel Sector clients, will need to reflect on how these changes could affect them, therefore.
Speak to an expert
The Xeinadin Indirect Tax team are here to assist when VAT gets complicated, contact them below.
