A short-term rentals company, Nomad Stays Ltd (“<span class="news-text_medium">Nomad</span>”), announced that it is challenging the Council of the European Union in the EU's highest court to revise the deemed supplier rules for value-added tax (“<span class="news-text_medium">VAT</span>”). The company is seeking the annulment of the deemed supplier provisions in the VAT in the Digital Age directive, which treat online platforms as the seller of goods for VAT purposes.
Nomad argued that these provisions significantly alter VAT treatment for short-term rental platforms. The company claimed that the new digital rules increase regulatory burdens and violate legal principles. Aymeric de Moncuit, a partner at Mayer Brown LLP representing Nomad, stated that the provisions wrongly assume that short-term rental services are directly competitive with and operate such as hotels.
The company’s legal challenge is based on several arguments, including errors in the assessment, violations of fiscal autonomy and infringements of the principles of proportionality and equal treatment. De Moncuit also emphasised that the new VAT regime could threaten the economic viability of independent operators, undermining fiscal neutrality and legal certainty.
Nomad urged policymakers to reconsider VAT regulations for digital platforms to foster innovation and ensure fair competition, asserting that the directive introduces unnecessary administrative complexity that could harm the digital economy's innovation.
