Agefi Luxembourg - mars 2025

Mars 2025 43 AGEFI Luxembourg Informatique financière T he ViDA Directive represents a major transformation in the EU’s VAT system, introducing real- time reporting and mandatory e-invoi- cing to enhance transparency and reduce fraud. By modernizing tax com- pliance and expanding the One- Stop Shop (OSS) regime, ViDA aims to streamline VAT obligations across Member States while mi- nimizing administrative burdens for businesses. Though the transition poses challenges, early adoption of digital tools will offer companies stra- tegic advantages, fostering a more efficient and harmonized tax environment. The EuropeanUnion is undergoing amajor trans- formation in its VAT systemwith the introduction of the set of rules proposed by the Council Direc- tive amendingDirective 2006/112/EC (the VATDi- rective) as regards VAT rules for the Digital Age (or ViDA). This ambitious reformseeks to address long-standing inefficiencies, harmonize VAT com- pliance across EUMember States, and enhance the use of digital tools in tax administration. As busi- nesses increasingly rely on digital platforms for transactions, traditional VAT systems struggle to keep pace with these changes. ViDA is designed to close these gaps by implementing real-time re- porting and mandatory e-invoicing, ensuring greater transparency and reducing opportunities for tax fraud. Officially approved on 12 February 2025 by the European Parliament, ViDA is expected to bring significant changes to how VAT is reported and collected. One of its primary goals is to minimize the VAT gap, which refers to the difference be- tween expectedVAT revenues and the amount ac- tually collected. Based on the latest available figures published by the EU in December 2024, (1) Member States lost EUR 89 billion in 2022. This gap, largely due to fraud, misreporting, and ad- ministrative inefficiencies, has been a persistent challenge across the EU. By introducing digital re- porting requirements and enforcing compliance at the platform level, ViDAaims to recover billions in lost tax revenue annually while also reducing the administrative burden on businesses. Beyond its financial and compliance benefits, ViDA also represents a significant step towards amore in- tegrated EU tax system. The Directive aligns with broader EuropeanCommission objectives tomod- ernize tax infrastructure and create aunifiedmarket with fewer barriers to cross-border trade. The adop- tion of digital invoicing standards and the expan- sion of the OSS regime are key elements of this effort, fostering a streamlinedVAT systemthat ben- efits both businesses and tax authorities. With full implementation set for 2030, businesses must start preparing now to adapt to the changing regulatory landscape and leverage the opportuni- ties presented by this digital transformation. Mandatory e-Invoicing and e-Reporting The ViDA Directive brings a significant shift in VAT compliance, requiring businesses to adopt structured e-invoicing and digital reporting by 1 July 2030 for their EU cross-border transactions. This reform enhances transparency, reduces fraud, and ensures timely VAT collection as e-in- voices will have to be submitted within ten days after a transaction occurs. Additionally, the new digital reporting systemwill replace the EC Sales Listing (ESL), requiring real-time, transaction- based VAT reporting. To comply, businesses will have to upgrade their financial systems, adopt automated invoicing so- lutions, and integrate digital tax compliance tools. Member States will implement connected tax in- frastructures to facilitate direct data transmission, streamlining audits and reducing administrative burdens. While the transition poses challenges, companies that embrace digitalization early will benefit from greater efficiency, reduced errors, and a simplified tax administration process. Many EU and non-EU countries have already implemented local e-invoicing rules. Germany, Belgium and France will do the same in 2025 and 2026. New VAT Rules for Digital Platforms ViDA also introduces new VAT regulations for digital platforms, shaping the tax landscape for business-to-consumer (B2C) transactions. From1 July 2028, businesses facilitating such transactions via electronic platforms will be subject to updated VAT obligations. By 1 January 2030, platforms of- fering short-term accommodation rentals (up to 30 nights) and passenger transport services within the EU must collect and remit VAT under the deemed supplier regime. The European Parliament has reinforced these regulations by mandating that online platforms pay VAT on third-party services, a measure de- signed to curb unfair competition and fraud. This reform is expected to recover up to EUR 11 billion annuallywhile simplifying tax administration for businesses. As part of a broader modernization of the EU’s VAT framework, the Parlia- ment has approved updates to the 2006 VAT directive, aligning digital platforms with traditional businesses in terms of VAT obligations. By enforcing equal tax treatment, this reform promotes fair competi- tion, particularly in the short-term rental and passenger transport sectors. While Member States may exempt small and medium- sized enterprises (SMEs) to prevent ex- cessive administrative burdens, the overarch- ing goal remains a more transparent and equitable VAT system across the EU. Expansion of the One-Stop Shop (OSS) Regime Another major development under ViDA is the expansion of theOSS regime. Beginning 1 January 2027, supplies of gas, electricity, heating, and cool- ing to consumers will be treated as EU distance sales, allowing businesses to report them through the OSS framework. From 1 July 2028, the OSS regimewill expand to include various other trans- actions, such as the supply of goods with installa- tion or assembly, sales of goods onboard ships, planes, and trains, as well as domestic B2C trans- actions. Additionally, a new OSS scheme will be introduced for intra-EU transfers of goods, reduc- ing the need for multiple VAT registrations across different EUMember States. This streamlined ap- proachwill significantly simplifyVAT compliance for businesses operating across borders. Impact on Luxembourg and the Financial Sector For Luxembourg as a key financial hub, the im- pact of ViDAwill be particularly pronounced. Fi- nancial institutions and multinational corporations engaged in cross-border operations must ensure their invoicing and reporting sys- tems align with the new digital standards. The shift toward real-time VAT reporting and e-in- voicing will require significant investments in compliance infrastructure, forcing the various business units to align with the real-time report- ing obligation of their legal entity. Businesses have to adopt advanced digital tools, integrate automatedVAT reporting solutions, and upgrade internal accounting and ERP systems. Additionally, staff training will be crucial to en- sure teams can navigate the complexities of digi- tal VAT reporting and remain compliant with the new regulations. Engaging with tax advisors and regulatory au- thorities will be essential for a seamless transition, as companies will need to interpret and imple- ment evolving VAT rules effectively. Businesses should conduct a thorough assessment of their ex- isting VAT procedures, identify areas requiring adjustments, and develop a structured roadmap for compliance. Given the broad scope of ViDA, organizations operating on digital platforms or fa- cilitating cross-border transactions will need to re- assess their VAT obligations to avoid potential risks and penalties. Despite the challenges, ViDA presents significant strategic benefits for certain Luxembourg-based businesses. The introduction of a single VAT reg- istration systemwill eliminate the need for multi- ple country-specific registrations, reducing administrative complexity and operational costs. This simplificationwill enhance overall VAT com- pliance, allowing companies to allocate resources more efficiently and focus on growth opportuni- ties. Moreover, by embracing automation, busi- nesses can streamline tax reporting processes, minimize manual errors, and improve financial transparency. Beyond compliance, ViDA serves as a catalyst for modernization. Companies that invest early in digital transformation will not only ensure regu- latory adherence but also enhance their opera- tional efficiency and competitiveness. By leveraging real-time data analytics, automated re- porting, and AI-driven tax solutions, organiza- tions can gain deeper insights into their financial operations, optimize cash flowmanagement, and strengthen risk controls. As the global economy continues to digitize, Luxembourg’s financial sec- tor stands to benefit fromamore structured, trans- parent, and harmonized VAT environment, fostering long-term growth and stability. No Luxembourg regulation on the topic is yet available. Various discussions have started at the level of various business associations, notably to monitor the impact of the implementation of local e-invoicing rules in the neighboring countries in Luxembourg businesses but also to prepare for discussion with the VAT authorities. The imple- mentation of a local e-invoicing obligation in the next few years is usually seen as a good test for local businesses and helps them to be ready to meet their cross-border obligations as from 2030. Conclusion The ViDA package marks a pivotal shift toward a VAT system that is not onlymore efficient but also more resilient against fraud and attuned to the dig- ital age. Like all transformative changes, its imple- mentationmay present initial hurdles, demanding adaptation and foresight from businesses. Yet, be- yond these challenges lies the promise of a system that fosters greater transparency, reduces complex- ity, and curtails inefficiencies. Thosewho embrace this evolution proactively will not merely comply with new regulations but will position themselves at the forefront of amore seamless, intelligent, and equitable tax landscape, where technology and trust converge to redefine the future of financial governance. Olivier LAMBERT, Partner, Indirect Tax Leader Nicolas BUFFIN, Senior Manager, Indirect Tax EY Luxembourg 1) Member States made significant progress in VAT Compliance in 2022, but continued efforts are still needed - EuropeanCommission ViDA and the Future of VAT: ADigital Revolution in European Tax Compliance Julien WINKIN, Managing Partner | External DPO&CISO@LUXGAP Entre protection des données, cybersécurité, résilience, continuité d'activité, IA et lanceurs d’alerte, il est parfois difficile de s’y retrouver ! Dans cette conférence, nous vous proposons une approche claire et concrète pour comprendre les enjeux de chaque réglementation, repérer les erreurs courantes et repartir avec des solutions immédiatement applicables en entreprise Jeudi 24 avril de 11h45 à 14h15 RGPD, NIS2, AI Act, Whistleblowing... : Les clés pour naviguer sereinement dans le nouveau paysage réglementaire PAF : 75 € TTC pp (Apéritif networking & Lunch 3 services compris) À verser sur le compte bancaire : BIC - GEBABEBB - IBANBE73 0015 4949 3760 – Réf. 24/04 Lieu : Cercle Munster : 5-7 rue Münster, L-2160 Luxembourg Parking : Saint Esprit ou service voiturier à partir de 12h (service payant 10€). Info club & devenir membre : www.ecofinclub.lu - didier.roelands@ecofinclub.lu