Position Paper on VAT in the Digital Age

In December 2022, the European Commission proposed a package of legislative measures to reform certain aspects of value-added taxation in the European Union. The VAT in the digital age (ViDA) package includes rules on a new digital reporting system, a single VAT registration for businesses and updated VAT rules for the platform economy.

The latter point is the main subject of our position paper on the ViDA initiative, as it specifically targets short-term accommodation platforms with a so-called “deemed supplier” regime.

The short-term rental (STR) market is among the most dynamic aspects of Europe’s tourism sector today. Over the past years, STRs have come to revolutionize the way many Europeans travel. Platforms engaged in the intermediation of STRs have played a significant role in the trend, providing consumer transparency and convenience to an otherwise opaque market. This has benefited both consumers and many STR hosts. eu travel tech recognizes the need to adjust and modernize EU tax legislation in light of these developments. A step in this direction was taken with the 7th revision of the Directive on Administrative Cooperation and the Central Electronic System of Payment Information. Our members fully support the objective of combating tax fraud and are committed to supporting authorities in the enforcement of VAT legislation wherever reasonable.

Nonetheless, we are concerned about certain elements of the ViDA package of proposals as presented by the European Commission, particularly the VAT deemed supplier regime and its possible application to platforms active in the STR market and passenger transport services. The proposed regime would introduce significant compliance costs, negatively affect VAT and STR channel neutrality and disproportionately impact SMEs and consumers engaged in the rental of short-term accommodation.

Please find our full position paper below.