VAT in the Digital Age (ViDA)

On 25 March 2025, the amendments to the VAT Directive were published in the Official Journal.

ViDA introduces far reaching changes that will affect all businesses with a particular impact SMEs engaged in intra-EU cross-border trade. Accountancy Europe has issued a factsheet that summarises the key changes.

Read the full publication in the “Download” section.

From 2030, businesses will have to issue e-invoice for all cross-border trade, broadly within 10 days of the transaction taking place or payment being received. This is a significant reduction from the current invoicing timeline and businesses will need to change their accounting systems and internal procedures to reflect this.

Also beginning in 2030 and linked to mandatory e-invoicing, practically all intra-EU supplies of goods and services must be digitally reported per individual transaction at the time the invoice is produced or should have been produced. Reporting will cover supplies and acquisition of goods and services –allowing tax authorities to link output tax to input tax reclaims.

Another significant change expands the deemed supply rules for electronic interfaces, or platforms, facilitating the supply of goods and services within the EU. The deemed supply rule will be extended to include supplies of short-term accommodation and passenger transport services.

The implementation of the various ViDa elements is staggered over a 10-year period.

From 25 March 2025:

• Member States are allowed to introduce obligatory e-invoicing for taxpayers established in their jurisdictions
• The European Commission has powers to introduce improvements to the Import One-Stop-Shop (IOSS) framework to reinforce Member States’ controls.

From 1 January 2027

• Some legislative clarifications and alignments will impact users of the One-Stop Shop schemes (OSS and IOSS) – mostly in respect of:
  • inclusion of supplies of gas, electricity heating and cooling
  • input VAT recovery
  • reporting of amendments to VAT returns

From 1 July 2028:

• The deemed supply rules will extend to platforms facilitating the supply of short-term accommodation rental and passenger transport services (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, a new transfer of own goods scheme
  • mandatory reverse charge for suppliers not established in the Member State where the supply is made

From 1 July 2030:

• Mandatory e-invoicing for cross-border supplies of goods and services
• Digital Reporting Requirements measures come into effect – the main impact will be on businesses making cross border B2B supplies

By 1 January 2035:

• Member States with domestic digital real-time transaction based reporting obligation in place before 1 January 2024 must align their systems with the EU system