The ViDA project is now a reality

On March 11, 2025, the European Commission adopted the new “VAT in the Digital Age” (ViDA) package, whose implementation will be progressively rolled out until 2035. This new framework introduces digitisation based on e-invoicing to combat tax evasion techniques such as carousel fraud, with estimated savings in compliance costs and measures to reduce the black economy by €11 billion per year.

In this context, the main milestones and new developments will be outlined, which are also the main pillars of the European project, to be implemented in stages:

First, reforms will be introduced to promote e-invoicing and correct tax imbalances related to digital platforms. Member States will therefore require electronic invoicing for domestic transactions, which will lead to the disappearance of recapitulative statements, replaced by a real-time reporting system in accordance with European standards.

At the same time, a mandatory digital information supply system will be introduced for B2B transactions, with direct electronic transmission. Digital platforms that act as intermediaries for rental or transport within the EU will become taxable persons and will be obliged to collect VAT, with certain exceptions. They will also have to keep records of transactions for 10 years. The data exchange system will thus be centralised through the VIES Central, which will coordinate tax information at European level.

On the other hand, platforms providing short-term rental or even passenger transport services will become ‘presumed taxable suppliers’ and will be required to collect and remit VAT if their users fail to do so. The aim of the so-called ‘platform economy’ is to harmonise the administration and tax treatment of VAT, thereby bringing tax systems closer together, which will ultimately benefit small operators who carry out their activities in different Member States.

Another notable milestone is the extension of the One-Stop-Shop (OSS) and the strengthening of the Import One-Stop-Shop (IOSS) mechanism required for platforms facilitating sales to European consumers from outside the EU. This will bring into force the legislative clarifications on the OSS/IOSS and the application of the reverse charge mechanism to B2B transactions by non-locally identified suppliers, together with other reforms for a single VAT registration to avoid multiple registrations in different countries.

In short, this ambitious legislative package introduces reforms that will have a real impact on harmonising the administration and treatment of VAT and will reduce both compliance costs and tax fraud.