By the way, Brussels wants e-invoicing and is also taking online platforms along
The European Commission will further digitize the VAT system in Europe with a system of real-time electronic invoicing to reduce fraud. Under the new plan, operators of online passenger transportation and short-stay platforms, such as Airbnb and Uber, will be responsible for collecting and remitting small business VAT from individual hosts and drivers who do not do so themselves.
According to figures from the commission, the EU member states have lost a total of 93 billion euros in VAT revenue in 2020. Such losses can no longer be afforded in these uncertain times with high energy prices, says the executive board of the EU.
That is why the committee wants to set up a new system where VAT returns are submitted via electronic invoicing and direct exchange of information. The switch to e-invoicing will reduce VAT fraud to 11 billion euros per year, the committee estimates.
Moreover, VAT arrangements in the EU can be cumbersome, especially for smaller companies that operate cross-border or want to scale up. The committee proposes that companies selling to consumers in a different collection only need to register once for EU-wide VAT purposes and fulfill their VAT obligations through a single online portal in one language. The new plans will reduce administrative costs for EU companies by more than €4.1 billion per year for the first ten years, she says.