VAT modernisation in Europe: digitalisation accelerates with the ViDA package
In November 2024, the Council of the European Union reached a political agreement on the “VAT in the Digital Age” (ViDA) legislative package. This reform marks a major step in the modernisation of the European VAT system, in response to the digitalisation of the economy and the need to fight tax fraud more effectively.
The objectives of the ViDA package
The ViDA package is based on an in-depth transformation of VAT obligations around four main areas:
The digitalisation of VAT returns, with the widespread adoption of electronic reporting and, eventually, near real-time data exchanges between businesses and tax authorities.
The extension of mandatory e-invoicing, in particular for cross-border transactions within the European Union.
The simplification of intra-EU trade, thanks to harmonised rules and the interoperability of digital systems.
A stronger fight against VAT fraud, which costs Member States tens of billions of euros every year, through better traceability of transactions.
The implementation timetable is gradual, with a ramp-up planned between 2027 and 2035, and a key milestone around 2030 for the full digitalisation of VAT obligations at European level.
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