On 25 March 2025, the European Union marked a milestone in VAT history with the official publication of the VAT in the Digital Age (ViDA) legislative package in the Official Journal of the EU. This marks the beginning of one of the most ambitious VAT reform projects in decades — one that will reshape how businesses across Europe comply with VAT obligations. ViDA introduces a series of far-reaching reforms aimed at modernising the VAT system, reducing administrative burdens, and enhancing fraud prevention. The measures are structured around three central pillars:
- Digital Reporting Requirements (DRR)
- Single VAT registration via the One-Stop Shop (OSS)
- New VAT rules for the platform economy
1. Digital Reporting Requirements (DRR)
The first pillar of ViDA establishes a mandatory framework for electronic invoicing (e-invoicing) and digital reporting, primarily focused on intra-Community B2B transactions. The initiative seeks to harmonise national systems and enable real-time data exchange across the EU.
As of 1 July 2030, businesses will be required to issue electronic invoices for cross-border B2B supplies in accordance with the European standard (EN 16931). These e-invoices must be issued no later than 10 days after the taxable event. The recapitulative statement (EC Sales List) will be abolished and replaced by real-time reporting via a central EU platform (“Central VIES”).
Real-time reporting will become a precondition for applying the VAT exemption on intra-Community supplies. Recipients may also be required to report their intra-Community acquisitions within 5 days, a deadline that also applies in self-billing scenarios.
Additional obligations include:
- Stating the supplier’s bank account details on the invoice
- An explicit reference to the triangulation scheme, if applicable
- References to previous invoices in case of corrections — a requirement already in place in many countries
Electronic invoicing will become the default method throughout the EU. Member States may only allow alternative invoice formats outside the scope of the DRR.
Member States may also impose electronic invoicing as a substantive condition for the right to deduct VAT.
From 1 July 2030, domestic e-invoicing systems must comply with the European standard. Member States with pre-existing national systems (implemented before 2024) will have until 1 January 2035 to align their systems with the new EU standards.
Despite its ambitious design, ViDA will not fully eliminate the fragmentation of technological requirements within the EU. While it harmonises cross-border reporting, national obligations such as SAF-T will remain in place. This means Member States can continue applying divergent domestic VAT reporting procedures.
In addition, ViDA does not provide for a standardised transmission channel for Digital Reporting Requirements. Although DRR applies at EU level, common technical interfaces are not included. Each Member State may build its own DRR infrastructure, which could significantly increase implemention costs for businesses operating in multiple Member States.
2. A single VAT registration across the EU: expansion of the OSS
The second pillar of ViDA focuses on expanding the One-Stop Shop (OSS) to reduce the need for multiple VAT registrations across Member States. This reform is expected to significantly ease the compliance burden for businesses engaging in cross-border activity.
From 1 January 2027, the OSS will be extended to cover supplies of electricity, gas, and heating.
As of 1 July 2028, the OSS will also apply to:
- All B2C supplies of goods and services within the EU (via the Union and non-Union OSS)
- Transfers of own goods between Member States (stock transfers), replacing the current call-off stock regime
In addition, a mandatory domestic reverse charge mechanism will apply from that date for B2B supplies by non-established suppliers and must be reported via the transaction-based digital reporting system.
Although ViDA significantly expands the OSS, it does not offer a solution for foreign VAT refunds. Businesses will remain dependent on slow and fragmented refund procedures and may still need to maintain local VAT registrations solely to reclaim VAT paid in other Member States.
3. New VAT rules for the platform Economy: the “Deemed Supplier” model
The third pillar introduces specific VAT rules for digital platforms facilitating short-term accommodation (up to 30 days) and passenger transport.
From 1 January 2030 (or optionally as early as 1 July 2028), platforms that facilitate such services will be deemed to be the supplier, unless the underlying provider has:
- Communicated a valid VAT number to the platform, and
- Declared that they will account for VAT on the supply themselves
Member States may define criteria, conditions, and limitations for what qualifies as short-term accommodation subject to VAT. They may not apply the deemed supplier model if the underlying provider is a small enterprise benefiting from a VAT exemption (e.g. annual turnover < EUR 25,000 in Belgium).
Furthermore, where goods are transferred between Member States for another taxable person, that person must be informed before the dispatch unless they explicitly requested the transfer themselves.
Implementation timeline of the ViDA package:
- 15 April 2025: ViDA enters into force (20 days after publication)
- 1 January 2027: OSS extended to supplies of electricity, gas, and heating
- 1 July 2028: Single VAT registration: OSS covers all B2C transactions and stock transfers
- 1 July 2028: Mandatory reverse charge for non-established suppliers
- 1 July 2028: Optional application of deemed supplier rules for platforms
- 1 January 2030: Mandatory deemed supplier regime for platforms
- 1 July 2030: DRR and mandatory e-invoicing for intra-EU B2B and domestic reverse charge
Conclusion
The adoption of the ViDA package concludes a complex and at times challenging legislative journey within the European Union. The European Commission first tabled the proposal on 8 December 2022, followed by intense negotiations among Member States. A political agreement was eventually reached in the ECOFIN Council on 5 November 2024, with formal adoption by the Council of the EU on 11 March 2025. The legislation was officially published in the Official Journal on 25 March 2025 and will enter into force on 14 April 2025.
ViDA means a new era for the EU VAT system, introducing simplifications and digital innovations. However, structural challenges remain, particularly caused by the absence of a unified technical reporting channel.
Given the phased but firm timeline — with key milestones in 2027, 2028, and 2030 — businesses must begin preparing now. ViDA is more than a regulatory shift; it presents a strategic opportunity to re-evaluate, streamline, and future-proof VAT compliance processes.