European Council not adopting ViDA (again)

Despite many efforts and compromise proposals, Estonia maintains their view to not be able to join the broad agreement on the VAT in the Digital Age (ViDA) package and refused support for the yet again updated text. As a result, the Belgian presidency of Vincent van Peteghem hands over the file to the Hungarian semester lead by Mihály Varga.

Reflecting the importance placed on the digitalization requirements in the VAT as well as the broader economic context of the single European Market, political agreement on the ViDA package was the top and only agenda item in the public session on 21.6.2024. In the public session, 17 member states explicitly voiced their support and the significant impact of the compromise on the table.
Still, Estonia maintains their position that the “deemed supplier” rules as proposed are not acceptable for the Estonian Small and Medium Businesses. Also the added option to “opt-out” does not satisfy their requirements to not implement the rules in Estonia.

Among those expressing support, Spain stressed the importance of keeping the integrity of the entire package to achieve its objectives. Germany urged considering the compromise for its very positive impact while voicing concerns that future deliberations may not lead to substantial changes in position.

Hungarian Minister of Finance Mihály Varga assured to keep the effort going on progressing on this important issue under their presidency starting on July 1st through the remainder of 2024. We’ll be sure to follow these discussions and hope for swift resolution and agreement.