VAT in the digital age – modernising the European VAT system

This factsheet summarises the main changes from the European Commission’s proposals to modernise the European VAT systems. The proposals were issued in December 2022 with the intention to:

• make the VAT system more suitable for e-commerce
• help fight fraud and improve fairness
• reduce administrative burden
• overall make VAT reporting more efficient

The proposals’ main area of change is to promote e-invoicing and have a near real-time reporting system for intra-EU cross-border commerce by 2028. Implementing the provisions will be a challenge for many tax authorities and businesses, especially SMEs (small and medium-sized entities).

This publication aims to support businesses and their advisors who should take note of the potential changes as soon as possible.