Timeline of intended changes to EU VAT rules

Who this will interest: businesses trading in the European Union

Essentia’s take: a welcome head-up for businesses on the coming large changes in EU VAT. In particular, long-foretold e-invoicing requirements that have been slow to kick-in as reality will, finally, be a major point of change in the coming years.

Key point(s): The EU will make changes to its reporting requirements and has published a timeline for the expected amendments.

Action points: Businesses should ensure their systems are compatible with the new requirements and any necessary amendments can be done on time.

In detail

The European Commission has published an overview of the timeline for implementing changes to its VAT system under the VAT in the Digital Age (ViDA) initiative.

As a reminder, the EU intends on aligning the current separate e-invoicing and electronic reporting systems in the EU under a single framework while also making its VAT system more friendly to the digital world.

The timelines for the main changes is expected to be the following:

• Q2 2026 – Publication of EU standard for e-invoicing;
• Q4 2026 – Development of central VIES should begin (approval of system architecture, functional and technical specifications of central VIES) – This will be a new platform that will be used for reporting cross border transactions in the EU and to validate EU VAT numbers. It is expected to replace the EC Sales Lists by 2030 when the system should be finalised.
• January 2027 – The European Commission hopes to extend the application of the the One Stop Shop for VAT to EV charging services.
• July 2028 – short term accommodation and passenger transport services provided via platforms will have new rules. The platforms will be responsible for collecting and paying the VAT on these transactions to the tax authorities.
• July 2030 – Mandatory structured XML e-invoicing and digital reporting for all cross-border business to business supplies of services in the EU will be mandatory;
• January 2035 – the real time reporting systems in all EU Member States should be aligned with the EU’s cross-border Digital Reporting Requirements (DRR) architecture.

Impact on businesses

Businesses trading in the EU will need to comply with the new rules. They should:

• Undertake a review of their own internal systems to ensure they are compatible with the changes the EU intends on making.
• This should be followed through with technical updates to their reporting software to comply with the new requirements when these will go live.

These amendments will need to be made while also allowing the business to continue trading under existing rules until the new ones come into force.

If you would like to discuss the proposed changes or the timeline please let us know.