The EU will force platforms like Uber and Airbnb to collect VAT to compete on equal terms with taxis and hotels

The agreement on this file, which required unanimity of the Twenty-seven, was frustrated on previous occasions by the reluctance of Estonia, which considered that the weight of the new rules was not going to fall on the platforms, but on small and medium-sized companies ( SMEs) that provide their services through them.

To bridge the gap, ministers have introduced, under the Hungarian presidency of the Council, some changes to reduce the administrative burden that the regulation places on SMEs.

“We have reached a good compromise on the two pillars that we agreed on from the beginning and now we also appreciate the results on the platform economy,” conceded the Estonian Minister of Economy, Jürgen Ligi, who supported the compromise text this Tuesday.

In addition, a transition period has been added that delays the application of the regulation, which will be voluntary from July 1, 2028 and mandatory from January 1, 2030, delaying the original Commission proposal by five years. European.

In this regard, the European Commissioner for Economy, Paolo Gentiloni, has welcomed the agreement, which has taken “time and effort”, although he has stressed that “the timely and coherent application of the rules would greatly benefit the functioning of the single market and the level playing field between traditional companies and the platform economy” and that “the public finances of all Member States would also benefit from a rapid entry into force.”

For its part, the Spanish delegation has included a statement in which it supports the general approach reflected in the proposal in relation to the digital platforms model, but has expressed its intention to apply it before 2028, as a simplification measure in the collection of the VAT and as a way to improve the fight against fraud.

Under current VAT rules, it is the underlying service providers – for example, the person renting your apartment – who are required to collect and remit VAT to the Treasury, but many of them, whether individuals or small businesses, companies, are unaware that they may be subject to VAT for the services they offer and even when they are aware, it may be difficult for them to familiarize themselves with the VAT system and comply with their obligations in this regard.

Thus, this reform aims to eliminate the current inequality in terms of VAT suffered by traditional operators in these sectors and, according to Brussels estimates, this change can bring Member States up to 6.6 billion euros per year in additional income in the next ten years and up to 48 million a year to the platforms themselves during the same 10-year period.

Now that the capitals have reached an agreement after two years of negotiations, the European Parliament will be consulted again on the agreed text, which will then have to be formally adopted by the Council before being published in the Official Journal of the EU and coming into force.

Electronic invoice and single window

As part of the same package, it is also intended to boost electronic invoicing in cross-border operations to help reduce VAT fraud by up to €11 billion a year and reduce administrative and compliance costs for EU traders. by more than 4.1 billion annually for the next ten years.

This legislative proposal modernizes the current EU VAT system for intra-EU trade, which, at almost 30 years old and, despite some recent improvements, has not kept pace with technological advances, the digital economy, changes in business models or globalization.

The third pillar of this package is a ‘one-stop shop’ model to allow businesses selling to consumers in another Member State to register for VAT once for the entire EU, and meet their tax obligations through a single online portal in a single language, a measure that could save companies around €8.7 billion in administrative and registration costs over the next decade.