Regulatory Update

Following the adoption by all member states on 11 March 2025, the VAT in the Digital Age (ViDA) package has now officially been published in the Official Journal of the European Union on 25 March 2025.

What does this mean in practical terms?

This means that the following legal instruments will be amended:

• The EU VAT Directive
• The Regulation on VAT administrative cooperation
• The VAT Implementing Regulation concerning requirements for certain VAT schemes.

These amending acts will enter into force on 14 April 2025, with different changes taking effect from that date through to 1 July 2035.

What is the ViDA (VAT in the Digital Age) package?

ViDA introduces significant reforms aimed at modernising and simplifying the EU VAT system through three key pillars, with the highest impact on e-invoicing and e-reporting.

1. New Digital Reporting Requirements (DRR) – July 2030 / 1 July 2035
   • E-invoicing will become the default standard for issuing invoices within the EU, from 1 July 2030.
   • If a Member State decides to implement real-time domestic transaction reporting, it must comply with the EU-wide standard.
   • Member States with domestic digital real-time transaction-based regimes already in place will need to converge to the ViDA model by 1 July 2035.
2. Single VAT Registration for cross-border businesses – January 2027 / July 2028
3. Modernisation of VAT rules for the digital platform economy – July 2028 / January 2030

Mandatory digital reporting in real-time (or near real-time) for cross-border B2B transactions, based on the EN16931 European e-Invoicing standard, significantly enhancing consistency across all Member States and reducing VAT fraud.

ViDA expands the One-Stop Shop (OSS) and import mechanisms, reducing the need for businesses to register for VAT in multiple EU Member States, resulting in simplified compliance.

Platforms facilitating short-term accommodation rentals and passenger transport will become solely responsible for collecting and paying VAT. New obligations also apply to platforms involved in selling goods and services online.

This adoption represents a clear step towards a more transparent, efficient, consistent, and digitalised European VAT landscape.

Act now:

• EU Member States will transpose these new rules into national laws between 2025 and 2030/2035.
• Tax authorities are moving more and more towards a 360-degree real-time view of businesses’ operations.
• Acting now means avoiding the risk of non-compliance, attracting the attention of tax authorities, leading to unnecessary costs and reputational damage.
• Businesses must act now, rethink their processes, and see the benefits and opportunities e-invoicing will bring to their organisation, while simultaneously being compliant with the upcoming compliance regulations.

BNP Paribas is ready to accompany you through this digital transformation, providing comprehensive solutions built on our industry-leading expertise and experience.