One step closer towards a Single VAT Registration in the EU

Ecommerce Europe and EuroCommerce welcome the final adoption of the VAT in the Digital Age package by the EU Finance Ministers yesterday. This agreement is a great step toward delivering a simplified and modernised VAT system in the EU.

Strong advocates for a Single VAT ID since 2021, EuroCommerce and Ecommerce Europe are particularly supportive of the “Single VAT Registration in the EU” (SVR) pillar of the package, as this will be a pivotal reform to significantly reduce the need for costly, time-consuming and often prohibitive need for businesses wanting to sell products across the EU to maintain multiple VAT registrations. The July 2028 implementation timeline could have targeted a more ambitious and earlier date, in line with the SVR implementation work that the Member States have launched already, but nonetheless, this agreement paves the way for ensuring simpler and modernised VAT rules for all businesses.

EuroCommerce Director-General Christel Delberghe commented: “The adoption of the package provides an important basis for the creation of a future-proof VAT system across the EU. Retailers and wholesalers are major collectors of VAT and have a strong interest in reducing obstacles to trade. More than 30 years after the creation of the Single Market, VAT obligations are still among the highest barriers for companies when trading cross-border. It is high time to adapt VAT to the needs of the 21^st century.”

Ecommerce Europe Secretary-General Luca Cassetti added: “The new VAT One-Stop Shop and Import One-Stop Shop are a success story and a milestone in the EU efforts to simplify VAT legislation. However, businesses with multiple warehouses in EU countries still need to VAT-register in each country of storage. This is costly and burdensome, especially for SMEs. Introducing a Single VAT Registration in the EU by extending the existing OSS would greatly reduce administrative procedures and help businesses thrive in the EU Single Market.”

Together with the use of a single EU VAT registration, the adopted package will bring modern reporting obligations and e-invoicing, as well as clearer rules concerning the VAT treatment of the platform economy. This package will lower the compliance costs of companies selling goods online and reduce administrative burdens. Businesses would find it much easier and faster to register and pay VAT throughout the EU, with easier access, particularly for SMEs, to intra-EU trade in the single market. Equally important, it will allow EU traders to become more competitive in an increasingly globalised and omnichannel retail environment.