All you need to know about VAT in the Digital Age (ViDA)

Website European Commission on ViDA

What Is ViDA?

Purpose

• To simplify VAT compliance across EU Member States
• To reduce VAT fraud through real-time digital reporting
• To adapt VAT rules to the platform economy and cross-border e-commerce

Council Adopted the VAT in the Digital Age (ViDA) package on March 11, 2025 – VATupdate

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Overview of ViDA’s Three Pillars

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Structure: 3 Key Pillars

Pillar I: Digital Reporting Requirements (DRR)

This is the most transformative part of ViDA, aiming to digitize and harmonize VAT reporting across the EU.

Key Features

• Mandatory E-Invoicing for intra-EU B2B and B2G transactions starting 1 July 2030
• Structured e-invoices must follow a common EU format (e.g., EN16931)
• Real-time digital reporting of invoice data to national tax authorities
• 10-day issuance rule: e-invoices must be issued within 10 days of supply or payment
• Customer reporting: Customers may also need to report received invoices within 5 days, unless waived
• Monthly summary invoices allowed under certain conditions
• Central VIES database: Tax authorities will share data via a centralized EU system

Goals

• Reduce VAT fraud (especially carousel fraud)
• Eliminate EC Sales Lists
• Lower compliance costs for businesses

Pillar II: Platform Economy

This pillar addresses VAT challenges in the sharing economy, especially for short-term accommodation and passenger transport.

Deemed Supplier Rule

• Platforms (e.g., Airbnb, Uber) are deemed to be the supplier for VAT purposes
  • Applies to:
    • Short-term rentals (max 30 nights)
    • Passenger transport by road
• Platforms must collect and remit VAT unless the underlying supplier provides a valid VAT number

Facilitation Services

• VAT applies to fees charged by platforms
• Place of supply rules:
  • B2B: VAT reverse-charged to recipient
  • B2C: VAT due where the underlying service is supplied

Record-Keeping

• Platforms must keep electronic records of all facilitated transactions for 10 years

Pillar III: Single VAT Registration

This pillar simplifies VAT compliance for businesses operating across multiple EU countries.

Components

• Extension of One Stop Shop (OSS)
  • Covers more transactions: domestic supplies, installation services, energy, etc.
  • Businesses file one VAT return via a single portal
• Mandatory Reverse Charge
  • Applies when supplier is not VAT-registered in the Member State
  • Shifts VAT liability to the customer
• Special Scheme for Transfer of Own Goods
  • Simplifies reporting of intra-EU transfers of own stock
  • Replaces the call-off stock arrangement (abolished after June 2028)

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ViDA Legal documents

• Council Directive (EU) 2025/516 of 11 March 2025 amending Directive 2006/112/EC as regards VAT rules for the digital age
  • Consolidated version of the EU VAT Directive 2006/112/EC once ViDA is enacted
• Council Implementing Regulation (EU) 2025/518 of 11 March 2025 amending Implementing Regulation (EU) No 282/2011 as regards information requirements for certain VAT schemes
• COUNCIL REGULATION (EU) 2025/517 of 11 March 2025 amending Regulation (EU) No 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital age

Other related developments

• Council Directive (EU) 2025/1539 of 18 July 2025 amending Directive 2006/112/EC as regards VAT rules relating to taxable persons who facilitate distance sales of imported goods and the application of the special scheme for distance sales of goods imported from third territories or third countries and special arrangements for declaration and payment of import VAT

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ViDA Timeline by Pillar (2022–2035)