ITR Indirect Tax Forum 2023: Convergence deadline for ViDA reporting in doubt

The European Commission is pushing for member-state convergence of digital VAT reporting, but the deadline for a single approach looks like it will be pushed back said a European Commission official today, May 23.

Digital reporting requirements (DRRs) and e-invoicing make up part of the Commission’s VAT in the Digital Age (ViDA) action plan, which was proposed in December 2022.

As part of ViDA, the Commission is set to enforce mandatory DRRs for transactions between EU member states. Optional DRR requirements will be available for domestic transactions initially, with the ultimate aim being full convergence.

Any new DRRs that are introduced will have to abide by intra-community principles, and the Commission has set a deadline of 2028 for existing requirements to converge with those principles.

However, the 2028 deadline looks as though it will be pushed back.

“I can see that date slipping,” Matthew Snoding, VAT policy officer at the Commission’s Directorate-General for Taxation and Customs Union, told the ITR Indirect Tax Forum 2023 in Brussels.

“It’s going to take quite a while for member states to develop their systems and it’s going to take a while for you guys to prepare your systems as well,” addressing the conference delegates.

Snoding did not provide a new probable date but he said the Commission is still pursuing its original plan to establish a consistent DRR policy.

“Our goal is convergence at a certain point in time, [member states] are fully aware of that,” added Snoding.”

Despite gradual convergence being broadly popular, some companies and jurisdictions across the EU have taken issue with certain aspects of ViDA.

Specifically, the requirement to submit reporting data within two days of an invoice being issued for a transaction has faced criticism owing to the timeframe being too short.

Snoding said that the reason for such a quick turnaround is that the Commission is seeking “real-time transaction-based reporting”, but that conversations regarding the criticism are taking place.

He added that nobody has disagreed outright with the principle of convergence but it is still up for debate what that will look like.

“What we have in the proposal will probably be quite different to what we have in the end,” he said.

The ITR Indirect Tax Forum is taking place on May 23 and 24.