As expected, the Ecofin Council today failed to reach agreement on the VAT in a Digital Age (VIDA) proposal. The often-cited problem lies in the proposal to consider digital platforms that facilitate services of short-term rental of accommodation and passenger transport as commission agents, requiring them to declare and remit VAT on the services facilitated through them.
Estonia continues to oppose this part of the proposal adapted under the Belgian presidency. Estonia does agree with the two other parts, mandatory digital reporting of intra-community transactions and taking measures to avoid, as much as possible, VAT registrations for businesses in member states other than that of establishment.
The Commission has always maintained the view that the three parts will be adopted together or not at all. But from the time the proposal was launched in late 2022, we indicated that the part on the platform economy would make an agreement on the whole extremely difficult. Estonia is also in favour of removing that part from the VIDA proposal so that agreement on the other two parts can already be formalised.
Belgian minister of finance Van Peteghem still wants to reach agreement within the Council by the end of the Belgian presidency and, like the Commission, still maintains the position that the three parts should be voted on as a whole even after this Council.
Estonia still puts forward an opt-in as a proposal for agreement, meaning that each member state should be able to choose voluntarily whether they will apply the commissioner principle for those platforms. But both the Commission and minister Van Peteghem indicated during the Council that they are not in favour of this.
