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Published:February 16, 2023

Denmark: VAT in the Digital Age Initiative Proposal for EU

Changes loom as Denmark becomes one of the first EU member states to introduce The VAT in the Digital Age (ViDA) for EU proposals as a part of the Digital Age initiative. Here’s what the process entails and what to expect next:

Denmark: VAT in the Digital Age Initiative Proposal for EU

The Danish Tax authorities have introduced The VAT in the Digital Age (ViDA) for EU proposals as a part of the Digital Age initiative. The introduction followed soon after The European Commission (EC) announced significant changes to the EU VAT regime on 8 December 2022. Here's what you need to know about Denmark's consultation period and how it links to the EU VAT proposal for 2023. 

The proposal process of the VAT in the Digital Age Initiative

The ViDA initiative proposal consists of amendments to three core pieces of EU legislation, the VAT Directive (2006/112/EC), Council Implementing Regulation (EU 282/2011) and the Council Regulation on Administrative Cooperation (EU 904/2010). 

Before these proposals can be rolled out, they must be sent to the Council, the European Parliament and the Economic and Social Committee for consultation. The Council comprises of all EU member states, who routinely meet to discuss, amend and adopt laws and coordinate policies. 

Denmark's decision to introduce The VAT in the Digital Age (ViDA) for the EU proposal forms part of the initial consultation period within The Council. Therefore, it can lead to additional comments, amendments and feedback on the EU ViDA proposal.

Introducing ViDA into Denmark

In an attempt to lessen fraud within the Digital Age initiative, The Danish Ministry of Taxation opened a consultation period for the recent ViDA for EU proposals. A variety of proposals were put up for consultation, with the following aims in mind; 

  • To introduce a new system, including e-invoicing, to implement real-time reporting requirements. 
  • To utilise a single VAT registration portal across the EU.
  • To update the passenger transport and short-term accommodation VAT rules.
  • To include a requirement for platform economy operators to collect and remit VAT.

Comments on the above were due on 23 January 2023. However, there has yet to be any further news regarding the conclusion of the consultation period. 

Aligning with the latest EU VAT regime changes

The fundamental changes within the ViDA for EU proposal recognised the need to reform three core pillars; Digital Reporting Requirements (DDR) & e-invoicing, platform economy tax collections for travel & accommodation and Single VAT Registration (SVR).

Regarding the digital reporting requirements (DDR), the newly proposed system is geared towards introducing real-time digital reporting. This is an attempt to better combat VAT fraud and will allow Member States to receive and transmit valuable real-time information through e-invoicing. 

For a closer look into the confirmed changes within the EU VAT Regime for VAT in the Digital Age, take a look at the first release of EU VAT regime changes here.

Find consistency amidst change with VAT IT

Keeping up with the latest developments can seem daunting when they impact your business processes and systems - especially if nothing is set in stone. Ensure that you always know what to expect (and when to expect it) with a team of VAT experts by your side.

If you have any questions or concerns about whether or not you're on the right track or how to get back on it - get in touch with your local VAT IT office here.



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