Final go for the ViDA package

On March 11 2025, The Economic and Financial Affairs Council (ECOFIN) has formally adopted the VAT in the Digital Age (ViDA) package, marking a crucial step towards modernizing VAT systems across the EU.

Short recap

This adoption follows a series of discussions and negotiations that began with the European Commission’s publication of the ViDA proposal on December 8, 2022 (Tax alert 1 & 2). Followed by progress made on 8 December 2023 (Tax alert 3) and despite setbacks, including the inability to reach an agreement during the meetings on May 14, 2024 (Tax alert 4) and June 21, 2024 (Tax alert 5), a breakthrough was finally achieved with all EU Member States agreeing to the package on November 5, 2024 (Tax alert 6). 

The formal adoption now marks the conclusion of this intensive process, which aims to modernize VAT systems and better align them with the digital economy. 

The ViDA approval consists of three core pillars: Digital Reporting Requirements (DRR), Platform Economy, and Single VAT Registration. These measures will be implemented in stages, with different application dates ranging from 2025 to 2035.

Pillar I: Digital Reporting Requirements (DRR)

Domestic DRR

• As from the date of entry into force of the Directive change (20 days after its publication in the Official Journal): Member States can introduce mandatory e-invoicing for B2B and B2C without needing approval from the European Commission.

• By 1 July 2030: Member States must align domestic DRR obligations with the EU standard or use interoperable formats.

• By 1 January 2035: Member States that had DRR or received a derogation before 2024 must align with the EU standard.

EU law allows substantial flexibility to Member States in implementing domestic e-invoicing and digital reporting requirements, without prescribing a standardized approach, and the Council recommends rolling out these obligations in stages based on taxpayer size and capacity to address the IT and administrative challenges.

Intra-EU DRR

By July 2030, e-invoicing will become mandatory for all intra-EU transactions (both goods and services). This will be combined with obligation for taxpayers to do real-time reporting of the e-invoice data to national tax authorities, who will share the data with the Central VIES database operated by the European Commission. 

Pillar II: Platform Economy

The platform economy pillar introduces a deemed supplier regime, which holds platforms responsible for VAT collection on certain short-term accommodation rentals (maximum 30 days) and passenger transport services. 

Member States will have significant flexibility in how they implement this rule, and it will begin on 1 July 2028, with mandatory adoption by 1 January 2030.

Other platform-related changes (e.g., taxation of facilitation fees and data retention obligations) will also take effect from 1 July 2028.

Pillar III: Single VAT Registration

Starting 1 July 2028, businesses will benefit from a simplified VAT registration process across the EU. This includes the ability to declare cross-border transfers of own goods under a single VAT number (OSS).

The UOSS return will encompass all B2C supplies of goods and services made by a business, including domestic supplies of goods within the Member State.

Member States will also be required to introduce a domestic reverse charge mechanism for non-established suppliers. The reverse charge mechanism will be expanded, shifting VAT liability to the customer when suppliers are not VAT-registered in the relevant Member State.

A specific measure aimed at facilitating cross border electric vehicle (EV) charging will become effective already as of 1 January 2027.