ARTICLE
20 March 2025

EU Council Adopts VAT In The Digital Age Package

Ki
KPMG in Cyprus

Contributor

KPMG has been operating in Cyprus since 1948 and currently employs more than 800 professionals working from 6 offices across the island. It is a member of KPMG International Limited, a global organisation of independent professional services firms providing Audit, Tax and Advisory services. KPMG operates in 143 countries and territories and has approximately 273,000 people working in member firms around the world. Clients look to KPMG for a consistent standard of service based on high-order professional capabilities, industry insight, local knowledge and expertise.
On 11 March 2025 the EU Council has adopted a comprehensive set of laws aimed to align the European Union's VAT rules with the digital transformation of the economies.
Cyprus Tax

On 11 March 2025 the EU Council has adopted a comprehensive set of laws aimed to align the European Union's VAT rules with the digital transformation of the economies. The changes will significantly affect provisions of the EU VAT Directive, EU Council Regulation regarding VAT administrative cooperation and EU Council Implementing Regulation in the following areas:

  • Digitalization of VAT reporting obligations for companies that sell goods and services to businesses in other EU member states by 2030.
  • Online platforms are obliged to pay VAT on short-term accommodation rentals and passenger transport services in most cases where individual service providers do not charge VAT.
  • Enhancement and expansion of online VAT one-stop-shops, eliminating the need for businesses to undergo costly VAT registrations in each member state where they carry out business activities.

A new set of laws will take effect on the twentieth day after their publication in the Official Journal of the EU. The regulations are directly applicable, but Member States will need to transpose new provisions of the EU VAT Directive into national law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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