Ecommerce Europe’s position paper on VAT in the Digital Age


Ecommerce Europe and its members are actively contributing to the European Union’s policymaking process to deliver a simplified and modernised VAT system in the EU. On the occasion of the European Commission’s call for feedback on the proposed VAT in the Digital Age (ViDA) legislation, Ecommerce Europe has submitted its consolidated position to show support for the EU’s efforts to address the shortcomings of the VAT E-Commerce Package, and for suggesting recommendations and improvements to the new set of rules introduced.

In particular, we warmly welcome the Single VAT Registration pillar, which falls in line with our Single VAT ID Campaign’s aim to support the extension of the already existing ‘VAT One-Stop Shop’ (OSS) model for online shopping companies in order to minimise the instances for which a taxable person is required to register in another Member State. Specifically, the ViDA proposal will extend the Union-OSS to cross-border movement of own inventory across the EU and to domestic sales from distribution hubs by a business that is not established in that country.

The new system would allow businesses selling to consumers in another Member State to register only once for VAT purposes for the entire EU, and to fulfil their VAT obligations via a single online portal in one single language. A single VRN can be advantageous not only for the European businesses, but also for Member States’ tax administrations, customs authorities, consumers, marketplaces and, last but not least, the environment. Further measures to improve the collection of VAT include making the ‘Import One Stop Shop’ mandatory for certain platforms facilitating sales to consumers in the EU.

However, the ViDA proposal also introduces new substantial changes to the existing legislation. Regarding the extension of the deemed supplier regime and a mandatory IOSS scheme for marketplaces, Ecommerce Europe calls for a thorough evaluation of the pros and cons of making the IOSS mandatory, to make sure that the measures further reduce the compliance burden for European platforms rather than increasing them and effectively discouraging marketplace models due too high risks and compliance costs.

We are committed to constructively collaborating with EU policymakers and we encourage the EU Commission and EU countries to consider a phased approach to adopt the proposal. To strengthen the EU Single Market and remove blockers for cross-border trade, the most urgent action is needed to ensure the implementation of the single VAT registration concept, including the introduction of the transfer module and the expansion of the Union One Stop Shop scheme.

Download our full position paper here.