- Approval of ViDA Package: On February 12, 2025, the EU Parliament approved the VAT in the Digital Age (ViDA) package, following a political agreement among member states. This package aims to modernize the VAT system by introducing mandatory digital reporting requirements, e-invoicing, and new rules for the platform economy, with full implementation expected by 2035.
- Key Reforms and Implementation Timeline: ViDA includes significant reforms such as the expansion of the One-Stop Shop (OSS) for cross-border transactions by July 2028, mandatory VAT collection for online platforms by January 2030, and a full transition to digital reporting and structured e-invoicing by July 2030. These changes are designed to enhance compliance, reduce fraud, and streamline VAT management for businesses.
- Impact on Tax Compliance and Fraud Prevention: The ViDA package aims to tackle an estimated €11 billion annual loss in VAT revenues due to fraud by implementing real-time digital monitoring and improved transparency. The phased rollout of these reforms will require businesses to adapt to new compliance requirements, ultimately leading to a more efficient and harmonized VAT system across EU member states.
Sources
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