EU Council plans to scrap paper VAT exemption forms
February 18, 2025
Paper tax forms will soon be history as the EU moves to digitalise VAT exemptions, promising businesses faster processing and fewer headaches when trading with embassies and international bodies.
Businesses trading with embassies and international organisations will face less red tape after EU finance ministers agreed to digitalise the VAT exemption system.
The European Council formally adopted new legislation on Tuesday (18 February) to phase out the current paper-based VAT exemption certificates in favour of an electronic system.
Polish finance minister Andrzej Doma?ski welcomed the change, saying: “Today, we are taking another step to simplify and digitalise our VAT systems. The certificate in its new form will substantially cut red tape.”
The certificates are required when goods are imported VAT-free for use by embassies, international bodies, or military forces. The shift to electronic documentation is intended to streamline processes for both businesses and authorities.
The paper certificates have long been a source of frustration due to their administrative burden, frequent processing delays, risk of errors and fraud, storage issues, and complications when dealing with cross-border transactions.
The new rules will come into force on 1 July 2031, with an additional one-year transition period allowing both paper and electronic forms to be used in parallel.
Technical specifications for the system will be developed in consultation with experts and implemented through Commission acts.
The move is part of the EU’s broader push to modernise tax administration under the ‘VAT in the Digital Age’ package. This package, proposed in 2022, aims to tackle VAT fraud and reduce compliance costs for businesses by requiring digital reporting and e-invoicing across member states. It also seeks to modernise VAT rules for online platforms.
Categories : World Focus
Tags : Digitalisation Digitisation EU Paper VAT
