Summary
- Businesses support ViDA and its objectives, but its success depends on genuine harmonisation across the EU rather than a growing patchwork of national e-invoicing and e-reporting models.
- Four priorities emerged from the discussion: one invoice standard, one e-reporting model, greater legal certainty, and the ability to implement solutions once and deploy them consistently across Europe.
- Without greater alignment between national and EU initiatives, businesses risk significant implementation costs, duplicate reporting obligations, and increasing operational complexity.
Extended Article
ViDA Meets Reality: What Businesses Need from Europe’s VAT Digital Transformation
During an IVA webinar held in Marseille on 22 October 2026, indirect tax practitioners examined how businesses are preparing for the next phase of Europe’s VAT digital transformation and what is needed to ensure that the VAT in the Digital Age (ViDA) package delivers its intended benefits.
The central message was clear: ViDA is the right reform. Digitalisation can improve VAT compliance, reduce fraud, and modernise how transaction data is exchanged between businesses and tax administrations. However, businesses are increasingly concerned that national e-invoicing and e-reporting mandates are evolving faster than the common European framework, creating a fragmented environment that risks undermining the benefits of harmonisation.
Today, many Member States already operate or are introducing their own digital reporting obligations, while ViDA’s digital reporting requirements will only begin to apply from July 2030. As a result, businesses are being forced to design and implement country-specific solutions years before a common EU model becomes operational.
One Invoice Standard
The first priority identified by businesses is the need for a single invoice standard across the European Union.
The VAT Directive already specifies the information that must appear on a VAT invoice, while the European invoicing standard provides the technical framework for exchanging that data electronically. In principle, this should allow companies to issue one compliant invoice that is accepted throughout the EU.
In practice, however, national requirements continue to emerge. Additional data fields, local validation requirements, product classifications, and platform-specific references often need to be incorporated into invoicing systems. Even when an invoice satisfies the requirements of the VAT Directive, it may still be rejected by local validation engines.
Businesses therefore argue that the harmonised invoice content defined by EU legislation should remain the central reference point. Any additional national requirements should be limited, justified, and carefully assessed to avoid creating unnecessary administrative burdens.
The same principle extends to invoice archiving. A structured electronic invoice should constitute the primary legal record, while human-readable formats such as PDFs should remain supporting documents rather than creating a parallel compliance obligation.
One E-Reporting Model
The second priority is the creation of a common e-reporting model.
While ViDA will establish a harmonised framework for intra-EU digital reporting, domestic e-reporting remains largely within the control of individual Member States until 2035. Different countries are therefore developing different reporting architectures, submission requirements, validation processes, payment reporting obligations, and technological infrastructures.
For multinational businesses, these differences create considerable complexity. The same transaction often has to be mapped to multiple reporting formats depending on where it takes place.
Participants argued that domestic and cross-border reporting should ultimately rely on the same core dataset and reporting architecture. Rather than layering new reporting obligations on top of existing requirements, digital reporting should simplify compliance and gradually replace legacy reporting obligations wherever possible.
The objective should be straightforward: report transaction data once using a common EU model, irrespective of whether the transaction is domestic or cross-border.
Greater Certainty
A third recurring theme was certainty.
Digital VAT regimes operate on transaction-level data and strict reporting deadlines. As a result, uncertainties around definitions, reporting periods, invoice issuance dates, and reconciliation processes have a much greater impact than under traditional VAT systems.
Questions remain regarding key concepts such as the moment an invoice is considered issued, how timing differences should be treated, and how pre-filled VAT returns will interact with taxpayers’ accounting records.
Businesses stressed the need for final technical specifications, explanatory guidance, and practical examples well before implementation deadlines. Stable implementation dates are equally important, as repeated postponements often create additional costs rather than reducing them. Projects that are already underway frequently require redesign, retesting, and reallocation of resources when implementation timelines change.
Participants also highlighted the growing importance of reconciliation. In a digital VAT environment, businesses must compare data held in their own accounting systems with information maintained by service providers, customers, suppliers, and tax administrations. Differences between those data sources are inevitable and should not automatically be interpreted as compliance failures.
For that reason, pre-filled VAT returns should serve as a useful indicator and reconciliation tool rather than a definitive statement of VAT liability.
Implement Once, Deploy Everywhere
The fourth priority is the ability to implement solutions once and deploy them throughout Europe.
Businesses are seeking greater interoperability across digital invoicing and reporting networks, clearer governance of electronic identities, and common fallback arrangements for situations where systems or transmission channels fail.
A common digital VAT framework can only function effectively if companies can rely on consistent infrastructure and standardised operating principles across Member States. Otherwise, businesses risk replacing traditional VAT complexity with digital complexity.
Single VAT Registration is widely viewed as a major step forward because it reduces the need for multiple VAT registrations. Nevertheless, challenges remain, particularly in areas such as input VAT recovery, domestic reporting obligations, and cross-border transaction scenarios that continue to require local analysis.
Looking Forward
The discussion concluded with a simple but important observation: the success of ViDA will ultimately be measured not by legislation alone, but by how effectively it works in daily business operations.
Businesses support digital VAT transformation and recognise the value of better transaction data, faster reporting, and increased transparency. However, achieving those objectives requires true harmonisation. The future model must allow companies to create a compliant invoice once, report transaction data through a common framework, and operate under clear and predictable rules across all Member States.
The message from Marseille was therefore clear: Europe should strive for a single digital VAT model that works consistently across the Union. Without that objective, businesses may face the cost and complexity of managing dozens of different national systems rather than benefiting from the harmonisation that ViDA is intended to deliver.
Author Luc Dhont
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