Estonia blocks ViDA proposal again at June ECOFIN meeting

Challenges with the deemed supplier regime

On June 21, 2024, the ECOFIN meeting ended without an agreement on the VAT in the Digital Age (ViDA) initiative, again blocked by Estonia. Estonia’s opposition to the deemed supplier regime impeded progress on related proposals, including Digital Reporting Requirements and Single EU VAT registration.

Estonia’s Concerns

Estonia argues that the deemed supplier regime imposes undue financial burdens on SMEs below the VAT threshold, distorting competition and pushing small businesses into the informal economy, undermining tax compliance and transparency.

Proposed Compromise

Estonia proposed a voluntary deemed supplier regime, but this compromise was not accepted. Several member states preferred the current framework, highlighting ongoing challenges in achieving consensus.

Future Implications

The ViDA proposal now moves to the Hungarian Presidency for further negotiations. This transition follows the EU’s rotational presidency system, with Hungary taking over from Belgium to continue discussions and seek resolutions.

Key Takeaways:

  • Estonia’s stance: Continued opposition to the deemed supplier rules to protect SMEs.
  • DAC7 directive: Importance of tax information.
  • Ongoing negotiations: The proposal moves to the Hungarian Presidency.

Receive our latest blogposts and updates