EU Reaches Agreement on VAT in the Digital Age (ViDA) Proposal
On Tuesday, 5 November 2024, the Economic and Financial Affairs Council (ECOFIN) of the EU finally reached agreement on the VAT in the digital age (ViDA) proposal, adopting all three pillars.
The ViDA initiative was first announced in December 2022, with the aim of combating tax fraud, supporting businesses, and promoting digitalisation of VAT. The new measures include rules on electronic invoices and real-time data reporting, alongside business carried out through digital platforms.
The most significant implementation dates are expected to be 1 July 2028, for the introduction of the Platform Economy and Single VAT Registration pillars, and 1 July 2030, for the Digital Reporting Requirements (DRR) and e-Invoicing pillar.
We spoke to two of our VAT experts at Ryan for their comments on the news:
Mariana Príncipe
Senior Director/Head of Compliance, VAT Compliance, Consulting and Recovery
“On November 5, the EU reached a significant consensus on the ViDA proposal. Finally, with Estonia agreement, it seems that all the 27 Member States are ready to proceed with this journey, marking a pivotal step toward simplifying VAT obligations across borders and strengthening efforts to combat VAT fraud. This agreement aims to streamline processes like e-invoicing, enhance the efficiency of digital reporting, and simplify compliance for cross-border businesses within the EU.
“The ViDA proposal will now be returned to the European Parliament to reapprove the text agreed. After this, the proposal will proceed to the council for acceptance and will be published in the EU's Official Journal, officially marking their entry into force.
“At this stage, we’re seeing Member States setting implementation dates for the various ViDA measures, stretching across the period from 2025 to 2035. Although we are seeing the extended and expected deadlines coming out, we realise several postponements when compared to initial proposals – this highlights the complexity of this reform. The timelines are uncertain, but we are coming to the point that it becomes even more crucial for businesses to start to stay updated and prepared for the upcoming changes – keeping pace with the VAT system reform will enable companies to be competitive in the global market.”
Jun Miyake
Principal, Tax Technology Consulting
“One of the three pillars of ViDA is the implementation of e-invoicing. Whilst many EU countries have already implemented or are in the process of implementing e-invoicing, this agreement on the ViDA proposal will hopefully provide more clarity on requirements and timelines and allow businesses to develop a solid business case for investment in the right technologies to support these requirements.”