VAT in the Digital Age (ViDA)

The VAT in the Digital Age (ViDA) package was adopted on 11 March 2025 following re-consultation of the European Parliament and will be rolled out progressively until January 2035. 

Upon entry into force (14 April 2025), Member States are able to introduce mandatory e-invoicing under specific conditions, and improvements were made to the Import One-Stop-Shop (IOSS) framework to enhance the control tools.

Effective by 1 January 2027, minor legislative clarifications will impact users of the One-Stop Shop (OSS) and IOSS schemes. From July 1, 2028, platforms in short-term accommodation rental and passenger transport by road must comply with new deemed supplier measures, while the Single VAT Registration reforms and mandatory reverse charge for non-identified suppliers will start.

Digital Reporting Requirements will affect cross-border B2B transactions from 1 July 2030. By 1 January 2035, Member States with a domestic digital real-time transaction reporting obligation must align their systems with the EU model and standards, marking the final phase of this comprehensive ViDA package.

The ViDA package was published in the Official Journal of the European Union under the L-series on 25 March 2025.

Legal acts:

• Directive - EU - 2025/516
• Regulation - EU - 2025/517

• Implementing regulation - EU - 2025/518

   

Real-time Digital Reporting Requirements (DRR)

The new system introduces real-time digital reporting for cross-border trade, based on e-invoicing. It will give Member States the valuable granular information they need to step up the fight against VAT fraud, especially carousel fraud. 

The move to e-invoicing will help reduce VAT fraud by up to €11 billion a year and bring down administrative and compliance costs for EU traders by over €4.1 billion per year over the next ten years. It ensures that, in time, existing national systems converge across the EU and paves the way for EU countries that wish to introduce national digital reporting systems for domestic trade. 

Updated rules for the platform economy 

Under the new rules, platforms facilitating supplies in the passenger transport by road and short-term accommodation rental sectors will become responsible for collecting and remitting VAT to tax authorities when the suppliers using the platform do not, for example because they are a small business or individual providers. 

Together with other clarifications, this will ensure a uniform approach across all EU countries and contribute to a more level playing field between online and traditional short-term accommodation rental services and passenger transport services by road. It will also simplify life for SMEs who currently need to understand and comply with the VAT rules, often in different EU countries. 

Single VAT Registration  (SVR)

Building on the already existing ‘VAT One Stop Shop’ (OSS) model for e-commerce, the new rules will allow more businesses selling to consumers in another EU country to fulfil their VAT obligations via an online portal in one EU country.  The SVR part includes improvements to the OSS processes (e.g. new correction mechanism), improvements for control purposes (e.g., IOSS (Import One Stop Shop) additional information before import, IOSS monthly listings per Member State of consumption), introduced a transfer of own goods module and ensures alignments to new legislation and schemes (e.g., interplay with the SME scheme).