On March 14, 2025, the European Union gave its final approval to the VAT package in the digital age, a series of measures designed to adapt the tax system to technological changes and the growing digitalization of the economy.
This definitive approval is the result of a long process of negotiation and debate among EU member countries, with the aim of modernizing the VAT system and making it more efficient and equitable for all businesses, especially those operating in the digital sphere.
But what does this VAT package in the digital age really entail and how will it affect businesses? Firstly, new rules will be established for the taxation of digital services provided by companies not residing in the EU. This means that these companies must register and pay VAT in the country where their customers are located, rather than in their country of origin.
Furthermore, there will be changes in how online platforms that facilitate the sale of goods and services declare and pay VAT. These platforms will have to assume greater responsibility for collecting and declaring the VAT of their sellers, which is expected to help combat tax evasion in this sector.
To prepare for these changes, companies will need to review their processes and systems to ensure they comply with the new tax obligations. This may include updating software and hiring staff specialized in VAT, especially for those businesses operating in multiple EU countries.
In short, the approval of the VAT package in the digital age represents an important step toward greater equality and transparency in VAT taxation within the EU. Now is the time for companies to get ready and adapt to these changes to avoid potential penalties and remain competitive in the digital market. At Vatontime, we are always ready to help with VAT compliance in the EU. Call us at +34 673 563 163 or send an email to info@vatontime.com.