EU Council finally adopts ViDA package
On 11 March 2025, the European Commission adopted the VAT in the Digital Age (ViDA) package. This initiative aims to modernise VAT systems across the EU, enhancing efficiency and compliance through digitalisation. We refer you to our previous communications on the topic and below is a summary of the key changes and their implementation timelines:
Immediate Changes (Upon ViDA Adoption):
- E-Invoicing: possibility for all Member States to introduce e-invoicing.
- IOSS Framework: enhanced controls within the Import One-Stop-Shop (IOSS) framework.
From 1 January 2027
- Legislative Updates: Minor legislative clarifications and alignments for One-Stop-Shop (OSS and IOSS) schemes.
From 1 July 2028
- Deemed Supplier Regime: Platforms facilitating short-term accommodation rental and passenger transport services will be subject to a deemed supplier regime. Member States may delay implementation to 1 January 2030.
- Single VAT Registration: Extension of OSS schemes and mandatory reverse charge supplies from non-identified suppliers.
From 1 January 2030
- Digital Reporting Requirements: Implementation of digital reporting measures for cross-border B2B supplies.
By 1 July 2035
- Real-Time Reporting: Member States must align any pre-existing domestic digital real-time transaction reporting systems with EU standards.
Key recommendations
Although some of these key compliance changes are some way away, planning should start now. E-invoicing and automated reporting require significant finance transformation projects, impacting not just accounting and systems specialists but also Tax & Legal departments. The mandatory deemed supply provisions for platforms make it crucial to seek contractual protection when it comes to passing on VAT liabilities and extra due diligence on customers' locations and status will be critical. Performing liability analysis in advance will also be essential to reduce risk of liabilities, interest and penalties.
