ViDA can be divided in the three main areas:
- Digital reporting (DRR) based on e-invoicing
- A single VAT registration: an extension of the OSS
- New VAT rules for platform economy and e-commerce
The most important ViDA changes are summarised below.
DRR based on e-invoicing
From early 2025: no derogation is required for domestic e-invoicing requirements
After adoption of the ViDA, EU Member States (MSs) are not required to ask for an agreement from the European Commission to implement e-invoicing requirements for domestic transactions (provided it applies only to established taxpayers). MSs should allow e-invoices that comply with the European standard on e-invoicing (EN 16931) adopted by the Commission Implementing Decision (EU) 2017/187055 and the Directive 2014/55/EU in the context of the B2G e-invoicing (the ‘European standard’).
MSs have the option to introduce mandatory e-invoicing for domestic B2B and B2C transactions (for established businesses) without the need for a derogation from the European Commission. This could leave businesses with minimal time to prepare.
From 1 July 2030: common DRR/e-invoicing for intra-EU transactions
There will be an obligation to:
- issue structured e-invoices including all required data in standard format within 10 days from a chargeable event; and
- transmit data from these invoices to the relevant national VAT authority’s electronic portal in real time.
This obligation will cover certain cross-border supplies and acquisitions of goods and services as well as supplies subject to the mandatory domestic reverse charge. While the supplier should report data of the sale when the e-invoice is issued or should be issued, the recipient of the invoice should report the transaction within 5 days.
The reverse charge would become mandatory from 1 July 2028 (see more details in Section 2 below under “Mandatory application of the reverse charge for B2B transactions by non-established suppliers”.
E-invoicing
The e-invoicing requirements will not only apply to all intra-EU supplies of goods and services but also for all cross-border and local supplies that are subject to the mandatory reverse charge.
Following additional data elements should be included on e-invoices:
- mandatory payment details and bank account numbers.
- in the case of an invoice that corrects the initial invoice, the corrected/initial invoice’s sequential number.
Summary invoices are allowed if issued no later than 10 days following the end of the calendar month to which this summary invoice refers.
Digital transaction-based reporting (DTBR)
The European Sales Lists (ESLs) will be abolished and replaced with DTBR.
The DTBR for intra-EU transactions will cover the same transactions that were covered by the ESLs with the exception of the call-off stocks which will cease to exist. In addition, supplies of goods and services subject to the mandatory reverse charge mechanism will also be included.
The data containing most of the mandatory VAT invoice details would need to be transmitted on a transaction-level basis in real time.
Reporting intra-Community acquisitions of goods and services
The person acquiring the goods and the recipient of the services should be required to report the e-invoice data on their intra-Community purchases of goods and services within 5 days. The purpose is to compare the data declared by the supplier with the data declared by the customer to detect VAT fraud.
The current VIES will be replaced by the Central VIES system
The Central VIES will be able to store data transmitted on cross-border operations, cross check information received on intra-EU supplies and acquisitions, aggregate data to make it available to national tax authorities by VAT registration number, and augment the data from the intra-EU transaction reports with other data sources like the customs surveillance system or the future Central Electronic System of Payment information (CESOP). In addition to its reporting uses, the Central VIES system would also contain taxpayer’s VAT registration data provided by the national tax authorities’ databases.
Harmonization of the domestic DRRs
From 1 July 2030, the domestic DRRs (if made use of) should comply with the harmonized EU system for DDR (e.g., real-time reporting of data on a transaction-by-transaction basis) and the possibility to transmit the data according to the European Standard should be provided.
MSs which already have domestic DRRs will have to adapt them to the features of the EU DDR system by 2035 at the latest.
A single VAT registration and other measures to reduce the compliance costs for business
This measure aims decreasing the need for multiple VAT registrations by expanding the OSS and domestic reverse charge.
Extension of OSS to all types of B2C supplies
The OSS scheme currently provides a business selling goods B2C in other MSs as well as a marketplace collecting VAT as the deemed supplier to fulfil their VAT compliance obligations via a single online portal. Several cross-border B2C services provided across the EU can also reported via the OSS.
From 1 January 2027, the scope of OSS is extended to cover supplies of electricity, gas and heat.
From 1 July 2028, the scope of OSS is extended to cover all B2C supplies of goods and provision of services.
The non-union OSS will cover all B2C supplies of services, and not only supplies of services to EU established customers.
The scope of the Union OSS scheme will be expanded to cover domestic B2C supplies of goods by businesses who are not registered for VAT in in the MS of consumption.
New special scheme for transfers of own goods
From 1 July 2028, stock transfers (i.e. movements of goods between EU MSs) could be reported in OSS. This means that businesses transferring stock between EU MSs could report those movement of own goods via OSS. The EU call-off stock simplification will become obsolete and will be phased out from 1 July 2028.
Mandatory application of the domestic reverse charge for B2B transactions by non-established suppliers
From 1 July 2028, the domestic reverse charge will apply for all B2B supplies of goods and services made by non-established businesses if the recipient of the goods or receiver of the services is registered for VAT in the MS in which the VAT is due.
The supplier need to report the reverse charged transactions in the ESL from 1 July 2028, and in the EU DRR (e-invoicing and transaction-based reporting), from 1 July 2030. The acquirer of the goods or services also needs to report the purchases in the EU DRR from 1 July 2030.
Updated VAT Rules for Platform Economy and E-Commerce
The proposed rules enhance the role of online marketplaces in the collection of VAT when they facilitate a supply of passenger transport or short-term accommodation.
Providing services of rental and passenger transport via platforms
From 1 January 2030 (optionally from 1 July 2028), a deemed supplier rule is introduced for platforms operating in passenger transport and short-term accommodation sectors. The platforms will be responsible for collecting and remitting VAT when their underlying suppliers will not charge VAT because they are, for example, individuals acting in their private capacity (non-entrepreneurs for VAT purposes) or exempted small businesses, for example, operating under the VAT registration threshold.
The proposed rules increase the administrative burden for certain platforms and the VAT burden for small businesses or individuals who operate via such platforms.
High-level timeline ViDA
- Early 2025: EU MSs may oblige businesses to issue e-invoices for domestic supplies. No approval of the European Commission for domestic e-invoicing required anymore.
- 1 January 2027: Updates in the e-commerce package; OSS extension to supplies of electricity, gas and heat.
- 1 July 2028: Single VAT registration (extension of the OSS to all B2C supplies, stock transfers and application of the mandatory reverse charge) and voluntary implementation of the deemed supplier rule to accommodation and mobility platforms.
- 1 January 2030: Extended VAT obligations for platforms: mandatory implementation of the deemed supplier rule to accommodation and mobility platforms.
- 1 July 2030: Mandatory Digital Reporting Requirements (DRR) based on e-invoicing for B2B intra-EU transactions and transactions subject to the mandatory reverse charge; harmonization of domestic e-invoicing (except these existing before 2024) with EU standards.
- 1 January 2035: Harmonization of pre-2024 existing domestic e-invoicing with EU standards.
