According to a press release after the meeting, "the Council exchanged views, making progress towards an agreement, on the value added tax (VAT) in the digital age package, which aims to tackle VAT fraud, support businesses and promote digitalization."

"There were no substantive changes, which is what Estonia stands for," Estonian Minister of Finance Mart Võrklaev (Reform) told ERR on Friday after the meeting.

According to Võrklaev, Estonia does not agree that a small business or private individual who provides their services via a digital platform and is not a VAT taxable entity should have to pay VAT. "In our view this is not fair to small businesses and we cannot accept such an arrangement," Võrklaev stressed.

Võrklaev also disagreed with the assessment published in several international media publications that Estonia was acting in the interests of Bolt, a platform-based company with majority Estonian owners.

"Well, of course, it has nothing to do with Bolt. It's just a ploy to try to influence us and say that we are lobbyists. But, again, we are not talking about putting an extra burden on the platforms in the form of VAT – the VAT liability essentially affects small businesses or individuals who are out there on the platforms, and their costs are going up. And ultimately the prices will go up and the consumer will pay for that," the finance minister said.

"Unfortunately, it is not the case that some platforms will start paying more – the impact and the pain will still hit the smaller entrepreneur, and indeed, Estonia is here to protect both Estonian and European small businesses," he added.

Võrklaev also said that Estonia had offered the Belgian presidency, which was looking to reach an agreement, the possibility of making the implementation of the VAT obligation optional for member states. However, the Belgians did not accept that option.

Finding a solution will now be the responsibility for the new Hungarian presidency, which will start its six-month term on July 1, said Võrklaev, who also heard supportive voices in the Council.

"During the Hungarian presidency, these debates will continue, and in today's discussion there was also an understanding from a number of countries that yes, there is an argument in Estonia's case, an agreement could be sought, and they are ready to consider it. I still believe that this agreement is possible, and all the more so because Estonia's offer takes into account the interests of everyone. I think it is possible," the minister explained.

VAT for platform services is currently paid by the supplier of the service, not by platforms such as Bolt or Airbnb. The European Commission however, has proposed change to the VAT rules, which would mean platforms are obliged to add VAT to the services they purchase themselves, if the individuals or small businesses supplying these services are not liable for VAT. An agreement to that end was not approved by the previous Council in May due to Estonia's opposition.

While Võrklaev has justified Estonia's opposition on the grounds that it would not be fair to people who want to earn some extra money from their home by renting it out via Airbnb, Killu Maidla, CEO of the Estonian Hotels and Restaurants Association, has told ERR that the association considers the agreement proposed by the European Commission to be a very reasonable solution.

On Friday, U.S. business daily Bloomberg cited anonymous diplomats as saying that Italy and Spain are among those that want the deal to collect VAT from companies such as Airbnb and Booking.com to go ahead, while Bolt has lobbying the Estonian government against such a measure. According to Bloomberg, French Finance Minister Bruno Le Maire said "there is an absolute need to have fair taxation of digital activities."

Politico also wrote on Friday that Estonia's actions appear to be heavily influenced by those of Bolt lobbyists. Politico also highlighted an earlier case from this spring when Estonia blocked the adoption of the Platform Work Directive.

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