Indirect Tax Briefing
On 11 March 2025 the EU Council has adopted a comprehensive set of laws aimed to align the European Union's VAT rules with the digital transformation of the economies. The changes will significantly affect provisions of the EU VAT Directive, EU Council Regulation regarding VAT administrative cooperation and EU Council Implementing Regulation in the following areas:
- Digitalization of VAT reporting obligations for companies that sell goods and services to businesses in other EU member states by 2030.
- Online platforms are obliged to pay VAT on short-term accommodation rentals and passenger transport services in most cases where individual service providers do not charge VAT.
- Enhancement and expansion of online VAT one-stop-shops, eliminating the need for businesses to undergo costly VAT registrations in each member state where they carry out business activities.
A new set of laws will take effect on the twentieth day after their publication in the Official Journal of the EU. The regulations are directly applicable, but Member States will need to transpose new provisions of the EU VAT Directive into national law.
