ViDA and VAT modernisation

What is VAT in the Digital Age (ViDA)?

The ViDA initiative represents a significant overhaul of the European Union (EU) Value-Added Tax (VAT) system. These measures aim to modernise and streamline VAT processes across the EU. The European Commission first proposed ViDA in December 2022. This initiated an extensive consultation period which resulted in the EU Council formally approving the package on 11 March 2025.

The ViDA initiative covers three main areas, each addressing a key aspect of VAT modernisation.

eInvoicing and digital reporting

This focuses on digitalising invoicing and reporting processes. It aims to improve efficiency and reduce fraud through electronic systems.

Platform economy

This addresses the growing role of digital platforms in the short-term accommodation rental and passenger transport sectors. It ensures appropriate VAT treatment for transactions facilitated by these platforms.

Single VAT registration

This will simplify compliance for businesses and promote trade across the EU by reducing the need for businesses to register in multiple EU Member States. It will achieve this by expanding the existing One-Stop Shop (OSS) schemes and extending the reverse charge mechanisms.

Next: ViDA implementation timeline