ViDA (VAT in the Digital Age)

What is ViDA (VAT in the Digital Age)?

ViDA (VAT in the Digital Age) is the EU's most comprehensive VAT reform in decades, modernizing and digitalizing the VAT system across all member states. The reform was finally adopted in the spring of 2025 and will be rolled out gradually leading up to 2035. The core of ViDA is to combat VAT fraud (particularly missing trader intra-community / carousel fraud) and remove administrative burdens by making structured electronic invoicing (e-invoicing) and digital real-time reporting mandatory for companies trading across EU borders.

The 3 main pillars of the ViDA reform

The EU's ViDA package is built around three strategic elements that fundamentally change the way companies invoice and account for VAT.

1. Digital Reporting Requirements (DRR) and e-invoicing. This is the most critical point for B2B companies. ViDA introduces harmonized Digital Reporting Requirements, where transactions across EU borders must be reported to authorities in near real-time. This means that traditional invoice formats like paper and PDF will be completely phased out and replaced by mandatory e-invoicing in a structured data format.

2. Updated rules for the platform economy. Platforms facilitating services within short-term accommodation rental and passenger transport will be assigned the role of a 'deemed supplier'. If the actual lessor or driver does not charge VAT (e.g., because they are a private individual or an SME), the platform becomes legally responsible for collecting and remitting the VAT.

3. A single VAT registration in the EU (Single VAT Registration). To reduce bureaucracy, the existing One-Stop-Shop (OSS) and Import One-Stop-Shop (IOSS) schemes are being expanded. The goal is that a company selling to consumers in multiple EU countries only needs to be VAT-registered in a single EU country instead of having to register locally in each individual member state.

Timeline for ViDA: When do the rules enter into force?

The rollout of ViDA takes place in phases over a 10-year period to give both authorities and the business community time to adapt their IT systems.

January 1, 2027 (OSS expansions): The first phase enters into force with minor legislative clarifications and a minor expansion of the One-Stop-Shop (OSS) scheme for B2C sales.

July 1, 2028 (Platforms and SVR): The rules for the 'deemed supplier' in the platform economy enter into force. Simultaneously, the major Single VAT Registration reforms and expanded rules for reverse charge are rolled out.

July 1, 2030 (Mandatory B2B e-invoicing and DRR): This is the cutoff date for broad B2B trade. Electronic invoicing becomes the standard method in the EU, and the requirement for digital real-time reporting (DRR) for cross-border B2B transactions becomes fully mandatory.

January 1, 2035 (Harmonization of national systems): The final phase, where member states that have already introduced their own national real-time reporting systems (such as Italy, Poland, or Germany) must have adapted and fully harmonized their systems with the EU's common ViDA standard.

What does ViDA mean for e-invoicing in your company?

Following the rollout of ViDA, a PDF invoice sent via email will no longer be legally valid as an e-invoice. ViDA requires that invoice data be exchanged in a structured, machine-readable XML format that complies with the European standard EN 16931-1:2026.

Furthermore, one of the most significant changes in the directive is that member states gain the right to introduce national e-invoicing requirements immediately. This means that a sender no longer needs to obtain the recipient's acceptance to send an e-invoice; the buyer's veto right disappears, and the recipient is obligated to be able to handle the format. Companies must therefore be technologically equipped to automatically receive and validate structured formats as soon as their trading partners or local authorities require it.

How does your company prepare for ViDA?

For many companies, ViDA is not just a tax project, but to a high degree an IT and automation project. To ensure timely compliance, you should focus on three areas.

Review the system landscape: Investigate whether your current ERP or financial system supports genuine e-invoicing and can handle the updated European standard (EN 16931-1:2026).

Focus on data quality: Since data must be reported to the authorities in near real-time, there is no longer time for manual error correction. Automated validation processes are crucial for catching errors before the invoice is sent.

Choose a future-proof e-invoicing partner: By integrating your inbound invoice processing with a specialized platform, you ensure that your data is automatically validated, matched, and converted in accordance with the changing legal requirements in both the Nordics and the rest of the EU.