European Union: Council Directive (EU) 2025/516 amending Directive 2006/112/EC including VAT reporting requirements for Member States enters into force

On 31 December 2026, Member States must adopt and publish the laws, regulations and administrative provisions necessary to comply with Article 2 of Council Directive 2025/516 on VAT rules for the digital age. These provisions will serve to amend Directive 2006/112/EC, with the stipulated alterations applying from the 1 January 2027. The changes concern the operation of the VAT system in the context of digital and cross-border transactions. The amendments introduce new regulations for electronic interfaces, with the aim of facilitating the sale of goods. In specific instances, platforms are to be regarded as though they have both received and supplied the goods themselves, particularly in cases involving low-value consignments imported into the Union, or goods sold domestically by suppliers not established within the European Union. Other updates affect cross-border movements of goods, the determination of the place where supplies are taxed, the timing of VAT liability, conditions for VAT deduction, invoicing obligations, and the operation of special VAT schemes including those used by non-EU businesses supplying services or goods within the Union. Member States are obligated to notify the European Commission upon the adoption of national measures transposing these provisions.