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Taxation and Customs Union
Press release8 December 2022Directorate-General for Taxation and Customs Union

Commission proposes measures to bring VAT into the Digital Age

On 8 December, the European Commission proposed a series of measures to modernise and make the EU's Value-Added Tax (VAT) system work better for businesses and more resilient to fraud by embracing and promoting digitalisation.

Today's proposal also aims to address challenges in the area of VAT raised by the development of the platform economy.

According to the latest VAT Gap figures published today, Member States lost €93 billion in VAT revenues in 2020. Conservative estimates suggest that one quarter of the missing revenues can be attributed directly to VAT fraud linked to intra-EU trade. These losses are clearly detrimental to overall public finances at a time when Member States are adjusting budgets to deal with the social and economic effects of recent energy price spikes and Russia's war of aggression against Ukraine. In addition, VAT arrangements in the EU can still be burdensome for businesses, especially for SMEs, and other companies who operate or are looking to scale-up cross-border.

Key actions proposed will help Member States collect up to €18 billion more in VAT revenues annually while helping businesses, including SMEs, to grow:

  • A move to real-time digital reporting based on e-invoicing for businesses that operate cross-border in the EU
  • Updated VAT rules for passenger transport and short-term accommodation platforms
  • The introduction of a single VAT registration across the EU

​​​​​​​Full details on the proposals and the legislative texts are available on our dedicated webpage


Publication date
8 December 2022
Directorate-General for Taxation and Customs Union