Dialogue on EU VAT in the digital age

This week Commissioner Wopke Hoekstra hosted an Implementation Dialogue on VAT in the Digital Age (ViDA). Representatives from businesses, business associations and advisers joined us to talk about this flagship reform of the EU’s VAT system.

The Goal: The event was a chance for businesses to take the floor and highlight their areas of concern in the implementation of ViDA. Their insights will prove invaluable as the Commission and EU Member States work to overcome these difficulties and unlock the potential of a more digital approach to VAT. The discussions also looked to the long-term, exploring how ViDA can open new opportunities to build the tax systems of the future.

Why it matters: VAT compliance remains a major challenge across Europe. Digitalisation offers a unique opportunity to boost revenues for Member States while easing the administrative burden on businesses. But it is vital to implement this shift in the right way, and that is why the Commission wanted to hear from businesses.

What was discussed:

The main issues highlighted were:

• The risk of fragmented application by Member States
• The need for increased support for SMEs
• The need for sufficient lead-times for application
• The need for a collaborative approach between businesses, the Commission and Member States
• The need to build a system which works for all
• The opportunities of overall digitalisation of business processes

The Commission is already working with Member States and businesses through a variety of fora, and has published a detailed implementation strategy, outlining the steps to be taken.

Many thanks to all participants who contributed to this successful dialogue. The engagement and input from all stakeholders are crucial to ensure the implementation process remains responsive as we build a VAT system that works for everyone.

In a comment, Gerassimos Thomas DG EU Commission Directorate Taxud said: ”Excellent ideas were voiced on how to avoid fragmentation and ensure the lowest possible administrative burden for SMEs and all companies. Further dialogues and road shows to be organised in member states”.