EU consults on adapting VAT rules to digital age

The European Commission on January 21 announced the launch of a consultation on how the value-added tax (VAT) system can be updated to adapt to the digital economy and new business models while also reducing burdens and costs for businesses.

The consultation is being held in advance of the planned issuance later this year of new legislation changing the way VAT is collected and reported. The legislation is intended to address digital reporting requirements for businesses in the EU, as well as rules with respect to digital platforms like Uber and Airbnb. It will also set out a single registration site for businesses in the EU.

The Commission is asking for stakeholder input on these planned legislative measures. It is also generally seeking comments on how the VAT rules are adapted to the digital age and how digital technology can both help states fight VAT fraud and facilitate business compliance.

The consultation is open until April 15.

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