Platforms, E-Invoices, and Single VAT Registration: Breaking Down the ViDA Reform

Introduction

On 11 March 2025, the Council of the European Union formally adopted the VAT in the Digital Age (ViDA) package – a major reform set to modernise VAT rules across the EU. ViDA is structured around three key pillars:

1. E-invoicing and Digital Reporting Requirements (DRR);
2. Platform Economy;
3. Single VAT registration.

These reforms, adopted under Council Directive (EU) 2025/516, will be implemented in phases to allow for a manageable transition across the EU.

Purpose of ViDA reforms

The transformation of the digital economy has exposed the structural limits of the EU VAT framework. Traditional VAT systems were not designed to capture the speed, volume, and complexity of today’s digital transactions, nor to leverage the vast amounts of data these transactions generate. As a result, businesses face a growing disconnect between how they operate digitally and how they are expected to comply with outdated VAT reporting obligations. The VAT in the Digital Age (ViDA) initiative, introduced through Council Directive (EU) 2025/516, addresses this mismatch by reshaping the Union’s VAT rules to align with modern digital realities. It does so by targeting friction points such as fragmented reporting systems, platform economy gaps, and the inefficiencies arising from multiple VAT registrations across Member States.

A core driver behind these reforms is the need to combat systemic VAT fraud and reduce the staggering EUR 93 billion VAT gap, of which EUR 40–60 billion is linked to intra-Community fraud. ViDA introduces a Union-wide digital reporting requirement (DRR) based on structured electronic invoicing, enabling real-time transaction-level data sharing between Member States. This harmonised system enhances tax authority oversight and reduces compliance costs for cross-border businesses, while offering the deterrent effect of automated cross-matching capabilities. The reform not only responds to citizen demands for fairer tax practices but also strengthens the integrity of the internal market by standardising reporting expectations across the EU. For businesses, this is both a compliance obligation and an opportunity to automate and future-proof VAT processes.

Summary of Key Upcoming Changes

Pillar 1 – E-Invoicing and Digital Reporting Requirements (DRR)

• From 1 July 2030, e-invoicing will become mandatory for cross-border B2B transactions within the EU.
• Invoices must be issued within 10 days from the chargeable event and transmitted digitally in real time or near real time to the tax authorities, using the European Standard (EN 16931).
• Member States must implement the new Digital Reporting Requirements from 1 July 2030. However, those with domestic real-time reporting systems in place or authorised before 1 January 2024 may defer implementation until 1 January 2035.These changes are aimed at enhancing VAT transparency and improving fraud detection, while also laying the groundwork for a digital and harmonised VAT system across the EU.

Pillar 2 – Platform Economy

• From 1 July 2028, digital platforms facilitating short-term accommodation rentals (up to 30 consecutive nights) or passenger transport by road within the EU will be treated as deemed suppliers, meaning they will be regarded as having received and re-supplied such services themselves.
• This rule applies only where the underlying supplier fails to provide a valid VAT identification number and does not declare that they will charge the VAT due.
• SMEs and certain exceptions will apply, but due diligence and reporting requirements for platforms will intensify.
• Additionally, the place of supply of facilitation services provided by platforms to non-taxable persons will, from 1 July 2028, be aligned with the place of the underlying transaction (Article 46a), avoiding mismatches in VAT treatment across Member States.

These measures seek to create a fairer VAT environment by ensuring that digital platforms play their part in VAT collection where suppliers are not registered or not charging VAT.

Pillar 3 – Single VAT Registration

• From 1 January 2027, the OSS scheme expands to include B2C supplies of electricity, gas, and heating.
• From 1 July 2028, it will be further expanded so as to cover supplies of goods with installation as well as movement of own goods across Member States. As a result, the call-off stock simplification will phase out between 30 June 2028 and 30 June 2029.
• A mandatory reverse charge mechanism will apply to B2B supplies by non-established and non-identified suppliers where the customer is VAT identified in the Member State of supply. Member States may extend this to additional B2B supplies at their discretion (Article 194).

These specific measures are set to allow businesses that operate across different Member States to register for VAT just once within the EU, thus reducing compliance costs and administrative burdens.

Key Implementation Timeline

Immediate Measures in more detail – from April 2025

1. Domestic e-invoicing [Articles 218(2) and 232(2)]

With the ViDA coming into force, Member States are allowed to mandate the use of e-invoicing for certain domestic transactions involving businesses established within their jurisdiction, without needing prior approval from the EU. This move empowers individual Member States to accelerate the adoption of digital invoicing at their own pace.

Additionally, countries that opt to implement this requirement may also waive the need for customer consent to receive e-invoices.

Importantly, these provisions do not create any obligation to implement digital reporting systems alongside e-invoicing. Member States retain full discretion to introduce reporting systems either independently or in conjunction with e-invoicing.

Until 1 July 2030, specifically for domestic transactions, national tax authorities may continue to define their own e-invoicing formats, meaning they are not required to align with the EU’s standard (EN16931) and this flexibility may remain even beyond that date for domestic transactions.

1. Improvements to the IOSS framework [Article 143(1a)]

In addition, with effect from April 2025, measures to improve the Import One-Stop Shop (IOSS) have been implemented.

One such measure is the introduction of a Unique Consignment Number (UCN) for every IOSS transaction. This number, generated through an EU-managed system, will be linked to the supplier’s IOSS VAT identification number and will change with each consignment. Customs authorities will use this number to cross-check transactions against the EU’s central database. Only after successful verification will the goods be cleared under the IOSS scheme.

These controls are designed to improve traceability and compliance, reducing the risk of VAT fraud in cross-border low-value imports.

Next Steps

The progressive implementation of the ViDA package over the next decade is set to bring significant changes for businesses and Member States alike.

In particular, for businesses engaged in cross-border operations, early preparation is crucial. The potential financial and operational impacts must be assessed promptly and they should actively liaise with tax authorities as well as professionals to stay updated on requirements, training and developments. In addition, platform based businesses should assess how the deemed supplier rules could impact their current business models.

Although the short-term adjustments may require investment and adaptation, the long-term benefits of ViDA are clear – simplified VAT compliance, fewer VAT registrations, enhanced fraud protection and a more harmonised digital VAT system across the EU. By acting now, businesses can not only stay ahead of the regulatory curve but also position themselves to take full advantage of a more streamlined and future-ready VAT framework.

Authors: Brandon Gatt, Partner, Zampa Partners & Nicole Zammit Fenech, VAT Senior, Zampa Partners