EU: VAT in the Digital Age package moves forward
The VAT in the Digital Age (ViDA) package, first introduced in December 2022, received European Parliament approval on February 12, 2025. Final approval from the EU Council is expected in March 2025, with revised implementation timelines. The package modernizes VAT compliance, expands digital reporting, and simplifies cross-border taxation.
Key measures of ViDA:
- E-invoicing and digital reporting – Real-time digital reporting for intra-EU transactions, effective July 1, 2030.
- Taxation of digital platforms – Platforms facilitating short-term accommodation and passenger transport will be liable for VAT from July 1, 2028.
- Single VAT registration – Expansion of One Stop Shop (OSS) to reduce VAT registrations from 2028.
E-invoicing and digital reporting
- E-invoicing: Member states can require e-invoicing for local sales once ViDA is approved.
- Digital reporting: EU-wide digital reporting begins July 1, 2030, but states with pre-existing systems have until 2035 to comply.
Taxation of digital platforms
- Platforms will be required to collect VAT on certain services.
- VAT will apply to the full selling price, not just commissions.
Single VAT registration and OSS expansion
- OSS will cover more transactions, including B2C sales of installed goods and goods in transit.
- Reverse charge mechanism will be mandatory for non-established suppliers.
Import One Stop Shop (IOSS) changes
- The €150 customs duty threshold will be removed under the 2028 Customs Union reforms.
- IOSS will apply to all B2C imports, simplifying VAT compliance.
ViDA introduces major VAT compliance changes across the EU. While most rules take effect in 2028 or later, businesses should prepare for increased digital reporting, VAT platform liabilities, and OSS expansion to streamline cross-border VAT obligations.
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