Real-time data reporting for VAT-purposes

In the ‘VAT in the digital age package‘ that the Council of the EU has reached agreement on (announcement) real-time data reporting is an important element:

With new rules on electronic invoices and real-time data reporting, as well as business carried out through digital platforms, this package of legislation will fight tax fraud, support businesses and promote digitalisation

It illustrates the move towards real-time data provision to governments, which I wrote about.

E-invoicing of B2B cross-border transactions & automated reporting
According to the new rules the VAT reporting obligations for cross-border transactions will become fully digital by 2030:

Businesses will issue e-invoices for cross-border business-to-business transactions and automatically report the data to their tax administration. This will be based on the existing European standard for e-invoicing in the area of public procurement. National tax administrations will then share the data through a new IT system that will be capable of providing analyses of suspicious activities.
A framework at national level will ensure the quality of the data included in electronic invoices, with flexibility for member states in the operationalisation of that framework.
This will provide member states with quick and complete information on cross-border transactions that they can use to fight VAT fraud.

It can be assumed that member states will extend the obligation to provide real-time transaction information to all domestic B2B-transactions [*].
An interesting side effect of these disclosures is that national and European governments gain insight into all B2B cross-border transactions carried out in the EU (and broader when domestic transactions are included). With this information, much more can be done than just fighting VAT fraud.

VAT on short-term accommodation and passenger transport services
Another element of the package is that online platforms will be required to pay VAT on short-term accommodation and passenger transport services in most cases where individual service providers do not charge VAT.

 

[*] For example, when implementing Directive (EU) 2023/2226, the Netherlands decided that domestic cryptocurrency transactions must also be reported real-time to the tax authorities (article).

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About Ellen Timmer

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