ViDA – new VAT rules for platform economy and e-commerce

ViDA can be divided in the three main areas:

1. Digital reporting (DRR) based on e-invoicing
2. A single VAT registration: an extension of OSS 
3. New VAT rules for platform economy and e-commerce

Following our preceding articles, including our general article about ViDA, this article gives a more detailed overview of the proposed changes in the area of the new VAT rules for platform economy and e-commerce and briefly comments on their impact on businesses. More details about other areas can be found by clicking on relevant links above.

Introduction

The proposed rules make platforms liable for charging and remitting the VAT when they facilitate a supply of passenger transport or short-term accommodation. 

Providing rental services and passenger transport via platforms

From 1 January 2030 (voluntarily from 1 July 2028), a deemed supplier rule will be introduced for platforms operating in passenger transport and short-term accommodation rental. This means that the platforms will be responsible for collecting and remitting VAT when their underlying suppliers will not charge VAT because they are, for example, individuals acting in their private capacity (i.e. non-entrepreneurs for VAT purposes) or exempted small businesses (e.g. operating under the VAT registration threshold). 

The platforms will be responsible for collecting and remitting VAT when their underlying suppliers

• will not provide their VAT numbers; and 
• has not declared that they will charge any VAT due on that supply. 

These platforms will also be required to collect and store information regarding services of short-term accommodation rental and passenger transport for which they are not held liable for VAT. 

According to the last amendments to ViDA package, the threshold for defining short-term accommodation is shortened to 30 nights. Furthermore, MSs are allowed to exempt supplies by SMEs falling under the EU special scheme for SMEs from ‘deemed’ VAT obligations.

Platform facilitation services

From 1 July 2028, the facilitation service provided by a platform will be regarded as an intermediary service. Consequently, the place of supply of the B2C facilitation services would follow that of the underlying transaction. This would bring changes in MSs who currently treat those services as electronic services for VAT purposes.