EU Member State Approves Draft Bill to Transpose First Part of VAT Digital Economy Directive

The Council of Ministers has approved a draft bill to amend VAT Law 37/1992, marking the first step toward implementing the EU’s new VAT rules for the digital economy under Directive (EU) 2025/516 (ViDA).

The ViDA directive builds on the e-commerce package of 2021 and aims to modernize VAT for digital transactions across the EU.

Key Objectives of the Directive

• Combat intra-Community fraud through standardized e-invoicing
• Simplify VAT registration, allowing businesses to operate with a single EU VAT ID
• Expand digital platform responsibilities, covering short-term accommodation and passenger transport services to address competitive imbalances

Implementation Timeline

• January 1, 2027: Phased introduction of key reforms
• July 1, 2028 & July 1, 2030: Major reforms take full effect

Additional Updates

• Extension of the non-Union scheme to more non-EU consumer services
• New representative requirements for non-EU businesses seeking VAT refunds
• Transitional regimes for call-off stock arrangements and energy supply via networks until full implementation

The draft bill represents a major step toward digital modernization of VAT, ensuring transparency, simplified compliance, and strengthened enforcement across EU Member States.