The European Council reached an agreement on Tuesday to introduce the value-added tax (VAT) for the platform economy, including online accommodation rental and passenger transport services. Once the new rules are adopted, platform economy operators will be responsible for collecting and remitting VAT if their service providers do not pay VAT themselves.
The Council said operators such as Airbnb and Uber have largely not paid VAT because their service providers are not required to register for VAT or are "unaware of their obligations or of tax compliance rules in other member states." The Council noted that this sometimes leads to "unfair competition between traditional accommodation and transport services and those operating through platforms." The legislation will go back to the European Parliament for approval.
