The EU Response to US Tariffs

As noted in our last update, President Trump signed a Presidential Memorandum ordering the development of a comprehensive plan (the Fair and Reciprocal Plan) to allow the Trump Administration to investigate the levies imposed on goods by other US trading partners and to devise a response. The review is expected to be completed by 1 April 2025. It is widely expected that President Trump may announce tariffs directed at certain imports from the EU following this review.

On 12 March 2025, US tariffs of 25% on steel and aluminium came into force and the EU announced countermeasures in response to these tariffs on the same day. The EU announced a two-step approach to the countermeasures:

• First, it was proposed that the tariffs that were designed to respond to the US tariffs introduced by the first Trump Administration in 2018 were to be reintroduced on 1 April but this proposal has since been delayed until mid-April; and
• Second, the Commission announced that a new package of countermeasures will come into force by mid-April.

On 26 March 2025, US Tariffs of 25% were announced on imported vehicles, to take effect on 3 April 2025. In response, the Commission issued a statement noting that “[t]he EU will continue to seek negotiated solutions, while safeguarding its economic interests”.

The Irish government are closely monitoring developments and are working closely with their EU partners to develop a response. Trade is within the exclusive competence of the EU and so any response must be agreed at EU level and Member States cannot act unilaterally. In this respect the Irish Minister for Finance described Ireland as a “massive beneficiary of globalisation and we remain an outspoken advocate of free-trade policies”.

In our Matheson Insight, we consider the EU response to US tariffs and examine the options available to the EU. We also consider the impact on Ireland and businesses operating in Ireland. Matheson is the only Irish law firm with customs and tariffs expertise and we have been helping clients navigate the potential impact of new US and EU tariffs.

Council Reaches Political Agreement on DAC9 and on the VAT in the Digital Age Package

DAC9

On 11 March 2025, the Council reached political agreement on the amendment of Directive 2011/16/EU on administrative cooperation in the field of taxation (“DAC9”). DAC9 facilitates the filing of a single Pillar 2 tax return in the EU and permits Member States to share the return, and in some cases, parts of the return with other EU Member States.

As a next step, DAC9 will be formally adopted by the Council. After that, it will be published in the Official Journal and will enter into force on the day following that of its publication. Member States will have to implement DAC9 by 31 December 2025. Countries opting to delay the implementation of the 'Pillar 2 Directive' are still required to transpose DAC9 by the same deadline.

VAT in a Digital Age (“VIDA”)

The ViDA initiative was also adopted by the Council on 11 March 2025. On 25 March 2025, the ViDA package was published in the Official Journal of the European Union and the directive, regulation and implementing regulation will enter into force on 14 April 2025. ViDA has three main objectives:

• Digital reporting requirements – these proposals aim to modernise the VAT reporting obligations by introducing digital reporting requirements that will standardise the information that needs to be submitted by taxpayers on each transaction to the tax authorities in an electronic format and at the same time it will impose the use of e-invoicing for intra-community transactions.
• Platform economy – these proposals address the challenges of the platform economy, by updating the VAT rules applicable to the platform economy in order to address the issue of equal treatment, clarifying the place of supply rules applicable to these transactions and enhancing the role of the platforms in the collection of VAT when they facilitate the supply of short-term accommodation rental or passenger transport services.
• Single VAT registration – these proposals aim to remove the need for multiple VAT registrations in the EU by improving and expanding the existing systems of One-Stop Shop / Import One-Stop Shop and reverse charge in order to minimise the instances for which a taxpayer is required to register in another Member State.

The implementation timeline is as follows:

• 1 July 2028: Single VAT registration.
• 1 January 2030: Platform economy (voluntary application from 1 July 2028).
• 1 July 2030: Digital reporting requirements and e-invoicing (full Member State harmonisation from 1 January 2035).

Conclusions on Decluttering and Simplification

The Council also launched their tax decluttering and simplification agenda calling for a comprehensive review of the EU’s tax legislative framework. The project is based on four principles:

• reducing the reporting, administrative and compliance burdens for Member States’ administrations and taxpayers;
• eliminating outdated and overlapping tax rules and, where relevant;
• increasing the clarity of tax legislation; and
• streamlining and improving the application of tax rules, procedures and reporting requirements.

The process will begin with a review of the Directives on Administrative Cooperation (ie, all of the EU exchange of information programmes) with a particular focus on DAC6.

As a next step, the Commission will issue a public consultation and have been instructed to prepare an action plan and timeline before the end of Autumn 2025.