The EU platform economy is estimated to generate a substantial €25.7 billion in VAT revenue annually. Given that the e-commerce sector contributes the majority of this revenue (€15.2 billion), it comes as no surprise that bolstering enforcement efforts and simplifying VAT regulations for this sector are central components of two major VAT reforms.
On December 8, 2022, the European Commission adopted the “VAT in the Digital Age” (ViDA) proposal — a comprehensive and multifaceted package of reforms pursuing three primary objectives, one of which is to modernize regulations governing the platform economy. Subsequently, on May 17, 2023, the Commission presented proposals for “the most ambitious and comprehensive reform of the Customs Union since its creation in 1968”. The customs reform aims to establish a tailored customs regime where platforms that facilitate e-commerce sales will be made responsible for all customs formalities and customs payment obligations.
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