On 11 March 2025, the VAT in the Digital Age (ViDA) package has been finally adopted by the Council of the European Union and the measures will be turned out progressively until January 2035.
The purpose of this package is to modernize and improve the VAT system in the EU to better align with the digital economy and prevent tax fraud by planning major changes.
The ViDA package is divided into the three following pillars:
- digital reporting requirements and mandatory e-invoicing;
- changes to VAT treatment for the platform economy; and
- simplified single VAT registration.
The various innovations will be introduced gradually with flexible timelines:
- Immediate entry into force of ViDA package
- Ability of Member States to introduce obligatory e-invoicing under certain conditions – possible impact on businesses in Member States introducing e-invoicing (national competence)
- Improvements to the Import One-Stop-Shop (IOSS) framework to make it more robust by enhancing Member States’ controls.
- With effect as from 1st January 2027
- some slight legislative clarifications and alignments impacting those using the One-Stop Shop schemes (OSS and IOSS)
- With effect as from 1st July 2028
- Deemed supplier measure for platforms facilitating the supply of short-term accommodation rental and passenger transport services – impact on platforms facilitating short-term accommodation rental and passenger transport services – however, Member States have the option to delay implementation until 1 January 2030.
- Single VAT Registration main elements come into effect:
- extension of the OSS schemes including set of improvements to the processes involving IT investments and new transfer of own goods scheme
- mandatory reverse charge for non-identified suppliers
- With effect as from 1st July 2030
- Digital Reporting Requirements measures coming into effect – main impact on businesses making cross border B2B supplies.
- By 1st July 2035
- Those Members who had a domestic digital real-time transaction-based reporting obligation before 1 January 2024 shall align their systems with the EU system.
For additional information, please refer to our previous newsletter on this topic, dated on 30 January 2025.
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