On Wednesday 30 October, the Member States’ ambassadors to the European Union (Coreper) reached an agreement in principle on the Value Added Tax (VAT) Directive for the digital age (ViDA).
While the Member States had reached a compromise on the rest of the package, VAT applied to digital platforms had been vetoed by Estonia. This veto could therefore be lifted on Tuesday 5 November at the next Ecofin Council meeting.
In June, Mart Võrklaev, the Estonian Finance Minister, rejected the deemed service provider scheme because he did not want the tax to affect small and medium-sized enterprises (SMEs) that provide their services via a platform (see EUROPE 13437/1).
Since then, the Hungarian Presidency of the Council has been working to reach a political agreement. According to a European diplomatic source contacted by Agence Europe, the latest compromise proposal, which has been approved by Coreper, introduces a transitional period for the implementation of the presumed service provider regime. It will be voluntary from 1 July 2028, and compulsory from 1 January 2030.
Hungary has also kept the proposal from the previous Belgian Presidency, which establishes an ‘opt out’ system for SMEs. This means that the tax will apply by default, but a Member State may decide not to apply the rules to SMEs. In addition, the administrative burden on these companies would be reduced. (Original version in French by Anne Damiani)