The European Council has officially approved the VAT in the Digital Age (ViDA) package, marking a significant shift in the management of VAT across the EU. The reform is adopted on March 11, 2025, and aims to align VAT rules with the realities digital economy.
The new framework is designed to simplify compliance, enhance tax reporting, and reduce fraud, as businesses increasingly operate across borders and online platforms play a bigger role in commerce. From the outset, Member States will have the option to introduce mandatory e-invoicing, and improvements to the Import One-Stop-Shop (IOSS) will help streamline cross-border trade.
The rollout will happen gradually, giving businesses time to adapt. By July 2028, online platforms facilitating short-term accommodation rentals and passenger transport will be subject to new deemed supplier rules, while Single VAT Registration reforms will streamline company operations across the EU. Digital reporting requirements for cross-border B2B transactions will take effect in July 2030. By 2035, all Member States with real-time VAT reporting will need to align their systems with EU standards. These changes make a step for improved and smoother tax compliance for businesses and tax authorities.
