Legislative proposal released to implement Single VAT registration
Legislative proposal released to implement Single VAT registration
The EU’s VAT in the Digital Age (ViDA) initiative introduces Single VAT registration (SVR) to reduce the need for businesses to register for VAT in multiple EU member states. As from 1 July 2028, SVR allows businesses to use a Single, centralized VAT registration for most cross-border supplies.
At the end of March 2026, the Netherlands clarified its intended approach to implementation of SVR by submitting a legislative proposal to the House of Representatives. This article summarizes the proposal and outlines steps taxpayers can take to prepare.
The SVR consists of three key components:
Currently, where the Netherlands is the member state of arrival, party C must be established in the Netherlands; a VAT registration alone is insufficient. This requirement will be eliminated under the proposal. As from 1 July 2028, a VAT registration will be enough.
Where a taxable person is established in one member state, the first EUR 10,000 of such supplies is taxed in that member state. Once the threshold is exceeded, VAT becomes due in the customer’s member state. Taxable persons that do not wish to apply the exception currently must notify the tax authorities. Because the threshold applies to all taxable persons, not only small businesses, startups expecting high volumes must also submit such a notification. As from 1 January 2027, it will be sufficient for the choice not to apply the exception to be reflected in the taxable person’s records.
At the end of March 2026, the Netherlands clarified its intended approach to implementation of SVR by submitting a legislative proposal to the House of Representatives. This article summarizes the proposal and outlines steps taxpayers can take to prepare.
What does the SVR entail?
Under the SVR, a business owner will generally need to register for VAT only once—in the member state of establishment. By expanding existing schemes, VAT obligations in other EU member states can be fulfilled without requiring local VAT registration. In addition, a new scheme relating to the transfer of own goods will be introduced.The SVR consists of three key components:
- Extension of the One Stop Shop (OSS): A broad range of transactions can be reported through a Single central VAT return in the member state of establishment.
- Extension of the mandatory VAT reverse charge mechanism: For cross‑border B2B supplies of goods and services, VAT liability will more frequently shift to the customer.
- A new transfer of own goods scheme: Movements of own goods within the EU will no longer automatically trigger local VAT registration.
Dutch implementation of the SVR
Because the SVR leaves limited room for national policy choices, the Dutch legislative proposal contains few surprises. Key elements include the following:Extension of the reverse charge mechanism
A notable feature of the Dutch proposal is that the new mandatory reverse charge mechanism will be introduced as a separate scheme, operating alongside the existing reverse charge rules. This dual structure may create uncertainty, as some supplies could fall under both schemes. Only supplies falling within the scope of the extended mandatory reverse charge must be reported in the EC Sales List (ESL). The draft legislation addresses this fact by referencing the VAT directive, but in BDO’s view, this creates a complex interaction between national law and EU rules. Taxable persons will need to assess carefully which scheme applies and which reporting obligations follow. There is room for simplification.Amendment of the simplified triangulation scheme
A positive development is the alignment of the simplified triangulation scheme with the VAT directive. This scheme applies to intraCommunity transactions involving three parties established in three different EU member states and prevents party B from needing to register in the member state of party A or party C.Currently, where the Netherlands is the member state of arrival, party C must be established in the Netherlands; a VAT registration alone is insufficient. This requirement will be eliminated under the proposal. As from 1 July 2028, a VAT registration will be enough.
Simplification of the small business exception in e-commerce
Another welcome change is the simplification of the small business exception in ecommerce. This exception applies to crossborder supplies of goods to private individuals within the EU—primarily by web shops—as well as telecommunications, broadcasting and electronic services supplied to private individuals in another member state.Where a taxable person is established in one member state, the first EUR 10,000 of such supplies is taxed in that member state. Once the threshold is exceeded, VAT becomes due in the customer’s member state. Taxable persons that do not wish to apply the exception currently must notify the tax authorities. Because the threshold applies to all taxable persons, not only small businesses, startups expecting high volumes must also submit such a notification. As from 1 January 2027, it will be sufficient for the choice not to apply the exception to be reflected in the taxable person’s records.
What can you do now?
Although the main SVR changes will not take effect until 1 July 2028, early preparation is essential. Taxable persons should begin to:- Map their VAT positions and registrations across the EU, including goods flows and crossborder supplies of services.
- Assess which transactions may be reportable via the OSS or may fall under the extended reverse charge or the new transfer of own goods scheme.
- Review systems and processes to make sure they are futureproof, particularly in light of upcoming einvoicing and digital reporting requirements.
