VAT in the Digital Age (ViDA)

The core of ViDA is Council Directive (EU) 2025/516, which amends the EU VAT Directive. A regulation on cooperation between tax authorities and an implementing regulation complete the package, and all three acts are dated 11 March 2025. The acts were published in the Official Journal on 25 March 2025 and entered into force on 14 April 2025, as the European Commission sets out.

Since entry into force, member states may require businesses established on their territory to issue e-invoices for domestic sales under conditions they set themselves. On 1 July 2028, the platform rules and the single VAT registration take effect, although a member state may postpone the platform rules until 1 January 2030. Digital reporting for cross-border trade between businesses starts on 1 July 2030, and member states with older national reporting systems must bring them into line with the EU rules by 1 January 2035.

From 1 July 2030, the invoice for a supply of goods or services to a business in another member state must be issued, transmitted and received in a structured electronic format. The format follows the European standard on electronic invoicing, EN 16931, and the syntaxes listed under the EU directive on e-invoicing in public procurement. A PDF attached to an email no longer counts as an e-invoice for these sales, and the buyer no longer has to agree to receive e-invoices that follow the standard.

The supplier issues the invoice no later than 10 days after the chargeable event and sends the invoice data to its tax authority when it issues the invoice. The customer reports the same transaction no later than five days after it receives the invoice, so the authorities can match both sides. Council Regulation (EU) 2025/517 sets up a central VIES system at the European Commission that cross-checks the reports of suppliers and buyers across member states. These transaction reports replace the recapitulative statements that businesses file for their intra-EU sales.

From 1 July 2028, a platform that facilitates short-term accommodation rentals or passenger transport by road is treated as the supplier of the service for VAT purposes. The platform charges and pays the VAT when the provider does not, for example a private host or a small business that gives the platform no VAT identification number and no declaration that it charges VAT itself. Short-term accommodation means the uninterrupted rental of accommodation to the same person for a maximum of 30 nights.

Member states may postpone this deemed supplier rule until 1 January 2030, and they may exclude providers that use the small enterprise scheme. The European Commission wants the rule to give online and traditional providers of accommodation and road transport the same VAT treatment across the EU.

A business that sells to consumers in several member states can need a VAT registration in each of them. From 1 July 2028, the single VAT registration extends the One Stop Shop, so the business declares and pays the VAT on these sales through an online portal in one member state. The package adds a correction mechanism for One Stop Shop returns and a module for the transfer of own goods to another member state.

Where a supplier is not registered for VAT in the member state of a sale to a VAT-registered business, the reverse charge becomes mandatory and the customer pays the VAT.

Billing software for intra-EU sales must produce invoices in the EN 16931 data model, issue them within the 10-day deadline and pass their data to the tax authority in parallel. The Peppol network is one channel for exchanging such invoices, because its invoice format Peppol BIS Billing 3.0 follows EN 16931. Accounts payable teams get a fixed deadline of five days to report each incoming cross-border invoice to their own tax authority.

From 1 July 2030, an invoice must also state the bank account numbers or the virtual account numbers of the supplier, and a corrective invoice must name the sequential number of the invoice it corrects. A structured account field lets the buyer's system prepare the transfer directly from the invoice and gives verification of payee a defined value to check before the money leaves. A supplier that collects payments through virtual IBANs can state that virtual account number on the invoice.

ViDA entered into force on 14 April 2025 and applies in stages after that date. The platform rules and the single VAT registration apply from 1 July 2028, and digital reporting with e-invoices for cross-border trade between businesses applies from 1 July 2030. National reporting systems that were already in place on 1 January 2024 have until 1 January 2035 to adapt to the EU rules.

For invoices between businesses in different member states, e-invoicing is mandatory from 1 July 2030. For domestic invoices, each member state decides whether it requires e-invoices and which formats it accepts besides the European standard.

Germany already requires businesses to receive e-invoices for domestic sales and phases in the obligation to issue them. ViDA adds e-invoices to business customers in other member states from 1 July 2030, together with reporting to the tax authority for each of these invoices.

For intra-EU transactions, the reports on each invoice take over the role of the recapitulative statement. Suppliers report a cross-border invoice when they issue it, and customers report it within five days of receipt, so tax authorities no longer depend on periodic summary lists.

The package consists of Council Directive (EU) 2025/516, Council Regulation (EU) 2025/517 and Council Implementing Regulation (EU) 2025/518, all of 11 March 2025. The directive changes the VAT rules for businesses, and the two regulations govern the exchange of data between tax authorities and its technical details.