EU details on VAT in the Digital Age (ViDA) package

• Agreement on ViDA Package: The EU Member States unanimously agreed on the “VAT in the Digital Age” (ViDA) package on 5 November 2024, aiming to modernize and improve the VAT system to align with the digital economy and prevent tax fraud.
• Three Pillars of ViDA:
  1. E-invoicing and Digital Reporting Requirements (DRR): Mandatory e-invoicing for transactions within the scope of DRR from 1 July 2030. A new digital reporting system will replace the EC Sales Listing, requiring transaction-by-transaction data submission.
  2. Platform Economy: New rules for B2C facilitation services and a deemed supplier regime for short-term accommodation and passenger transport services starting optionally from 1 July 2028 and mandatorily from 1 January 2030.
  3. Single VAT Registration: Expansion of the OSS regime to include more types of B2C supplies from 1 July 2028, and the introduction of a new OSS regime for the transfer of own goods between EU countries.
• Implementation Timeline:
  • E-invoicing and DRR: Effective from 1 July 2030.
  • Platform Economy: New rules effective from 1 July 2028 (optional) and 1 January 2030 (mandatory).
  • Single VAT Registration: New rules effective from 1 January 2027 and further expansions from 1 July 2028.
• Mandatory Domestic Reverse-Charge Mechanism: A reverse-charge mechanism will become mandatory for supplies performed by a taxable person not established in the EU Member State where VAT is due, effective 30 June 2029.
• Impact on Businesses: The ViDA changes will significantly impact the VAT landscape, requiring businesses operating in the EU to assess the effects and update their systems and processes in advance of the new rules’ adoption.

Source EY

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