VAT in the Digital Age (ViDA)

The European Fund and Asset Management Association (EFAMA) has commented on the European Commission’s ViDA (VAT in the Digital Age) proposal.
The ViDA proposal aims to update the current VAT framework to better reflect the digital economy, address challenges faced by tax administrations, and reduce the VAT gap.
EFAMA welcomes the ViDA proposal and the consistency of the proposal with regards to VAT-exempt services not being covered by the new Digital Reporting Requirements (DRRs), which should help tax authorities focus on the real risk of tax fraud cases without creating new burdensome procedures/compliance obligations. However, EFAMA’s concerns are limited to the DRRs introduced to fight tax fraud. The proposal suggests a two-day delay to issue and report invoices, which EFAMA notes will be extremely short and lead to practical difficulties. Summary invoices must be maintained as an extremely useful tool in the investment management industry, and the authorisation of the customer to accept electronic invoices should be delayed until 2025. EFAMA stands ready to assist and discuss the issues raised with the technical teams of the relevant stakeholders that will work in the upcoming negotiations of the ViDA proposal.