Press release – Parliament green lights update of VAT rules to make them fit for digital times
Published on 2025-02-12 11:23
The European Parliament has today adopted an update to the VAT rules to make them fit for digital times. The new rules will simplify VAT for businesses and consumers, and will make it easier for tax authorities to collect VAT revenues.
The new VAT rules will:
- Introduce a new, simplified VAT regime for small businesses
- Create a new, single EU VAT registration number for businesses
- Make it easier for businesses to sell goods and services online
- Strengthen the powers of tax authorities to collect VAT revenues
The new VAT rules will come into effect on 1 January 2026.
Background
The current VAT rules were adopted in 1993, and have not been updated since then. The digital economy has changed significantly since 1993, and the current VAT rules are no longer fit for purpose.
The new VAT rules are designed to address the challenges of the digital economy. They will make VAT simpler for businesses and consumers, and will make it easier for tax authorities to collect VAT revenues.
Next steps
The Council of the European Union must now formally approve the new VAT rules. The Council is expected to approve the rules in the coming months.
Once the Council has approved the rules, they will be published in the Official Journal of the European Union. The rules will come into effect on 1 January 2026.
Press release – Parliament green lights update of VAT rules to make them fit for digital times
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