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The Economic and Financial Affairs Council (ECOFIN) has finally reached a significant agreement on the VAT in the Digital Age (ViDA) legislative proposal. Given the significant changes to the original 2022 proposal, a further reconsultation of the EU Parliament is now required before the package can be formally adopted and enter into force.
Evolving ViDA Proposal and Amendments
The ViDA package, as amended by the European Commission, has remained a key agenda item for the ECOFIN Council over the past two years, with various elements the subject of extensive negotiations. One particularly controversial component was the "deemed supplier" regime within the “Platform Economy” pillar. Despite the ongoing discussions, a broad compromise has been reached, with updates to the timeline for rollout and clarification of specific sections. With the commitment of the countries holding the EU Presidency, the goal is to finalise and adopt the package soon.
Since its announcement on 8 December 2022, ViDA has been the subject of active negotiations between EU Member States. The recent ECOFIN agreement reflects an evolving consensus that aims to streamline digital VAT reporting requirements across the EU.
Key Components and Timeline of the Digital Reporting Requirements Pillar
Mandatory Intra-Community Electronic Invoicing
From 1 July 2030, electronic invoicing (e-invoicing) in accordance with the European e-invoicing standard (EN 16931) will be mandatory for intra-community transactions. A crucial update allows Member States the flexibility to use alternative standards for domestic transactions when mandating e-invoicing, thereby accommodating country-specific systems without conflicting with the EU-wide framework.
Under the revised ViDA proposal, the deadline for issuing intra-community invoices is extended from the initially proposed two days to 10 days after the chargeable event, although still shorter than the current 15-day rule. This is intended to strike a balance between ease of compliance and timely availability of data.
ViDA also allows Member States to impose e-invoicing obligations for domestic transactions and to waive the buyer’s right of acceptance, bypassing the need for derogation requests under the VAT Directive 2006/112/EC. These provisions will be enforceable upon ViDA’s enactment, also allowing Member States to set up accreditation schemes for third-party service providers who issue invoices on behalf of taxpayers.
Mandatory B2B Intra-Community Digital Reporting Requirement
Starting 1 July 2030, all businesses will be required to report intra-community B2B transactions digitally to their local tax authorities. To avoid fragmentation, a harmonised, pan-European digital reporting requirement will include standardised data reporting. This will allow tax administrations to cross check transactions in real time, increasing VAT compliance and transparency across Member States.
Taxable persons will benefit from mandated tools to facilitate the transmission of invoice data to tax authorities, whether directly, through third-party service providers, or via available public portals. However, no specific reporting protocols are mandated, allowing Member States a degree of flexibility to tailor their implementation. By 1 January 2035, countries with existing mandatory e-reporting systems must align with the pan-European standard.
Staying Informed
As ViDA progresses, Unifiedpost Group remains committed to keeping our customers and partners informed of the latest regulatory updates. To keep up to date with ViDA and other VAT compliance news, subscribe to our monthly tax compliance newsletter or tune into our Compliance Pulse podcast, which brings you timely updates on tax compliance and e-invoicing regulations.
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