The EU plans to offer a digital wallet that will allow residents to securely store payment details for online transactions. The digital wallet will allow EU residents to make payments on government websites and pay utility bills.
The Digital Identity Wallet will also electronically store official documents, such as ID documents and driver’s licenses.
According to reports, companies that access data via the wallet will be prohibited from using the other for other commercial applications.
EU officials hope to have the digital wallet system operational by 2022. Officials need to coordinate with all member states to ensure the digital system works throughout the EU.
According to officials, the system will be voluntary, and users will have control over how much data they provide.
How digital payments affect VAT
As more transactions become digitised, sometimes in unexpected way, regulators are working hard to ensure VAT rules keep up.
For instance, UK authorities recently clarified that payments made using cryptocurrency would be subject to ordinary VAT, calculated in the pound sterling equivalent. However, HMRC also said the guidance was subject to change as regulations evolve.
At the same time, technology has raised important questions about the status of work under the gig economy. Are gig economy workers private contractors or employees? It’s not just an academic question. The answer has legal implications. For instance, whether or not workers ought to be VAT registered.
Consolidating and simplifying EU digital VAT
Technology has also profoundly affected consumer habits. In 2021, the EU is implementing broad changes in the way VAT is accounted for on online transactions.
Digital VAT technology for a digital world
Vatglobal’s VAT compliance technology is designed to ensure your business has the advanced tools you need to meet the new paradigm of VAT compliance. Whether you’re paying using an EU digital wallet or Bitcoin, you need to consider your VAT obligations carefully.
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