ViDA Directive:
The EU moves to mandatory electronic invoicing

ViDA Directive: a new EU-wide VAT system

Combating tax fraud

For the Member States, the objective is clear: to better combat tax fraud linked to intra-Community trade, which costs them several billion euros every year.

A simpler, more efficient and fairer VAT system

The benefits of ViDA are numerous. It is estimated that the introduction of the ViDA programme will enable EU member states to recover no less than €18 billion in additional VAT each year.

In addition to reducing the ‘VAT gap’ for tax administrations, ViDA aims to :

• Reduce the administrative burden on businesses through single VAT registration
  and the widespread use of electronic invoicing.
• Enable more seamless cross-border trade through interoperable systems.
• Put traditional and digital economies on an equal tax footing by clarifying VAT rules and the ‘deemed supplier’ regime.

What are the 3 pillars at the heart of the ViDA initiative?

N°1 - Real-time digital declaration based on electronic invoicing

The cornerstone of ViDA's transformation. It introduces the principle of mandatory electronic invoicing for intra-EU B2B transactions from 1 July 2030. In practical terms, companies will be subject to two obligations for these transactions:

• E-reporting obligation: businesses will have to transmit their tax data in real time via a new European digital declaration system. This aligns EU VAT reporting with the global trend toward Continuous Transaction Controls (CTC), already adopted in many countries.
• E-invoicing obligation: electronic invoices will have to comply with the EN16931 standard. A simple PDF invoice will no longer be compliant. This standardisation will ensure that invoices are exchanged in a structured format that can be processed automatically.
   

N°2 - Online platforms' responsibility for collecting VAT

The rise of international digital platforms is a challenge for tax authorities. This is particularly true of marketplaces that that facilitate peer-to-peer services like accommodation and transport. This is a whole area of the European economy that is largely exempt from VAT.

From 1 January 2030, the situation will change: under the ‘deemed supplier’ rule, digital platforms will be responsible for collecting VAT on transactions carried out via their services when individual sellers fail to do so.

N°3 - A single VAT registration system for intra-EU transactions

The third pillar of ViDA is the extension of the One Stop Shop (OSS). With this one-stop shop, businesses will be able to register once in a Member State to declare and pay VAT throughout the European Union. Gone are the days of having to register in every country; now it's time to simplify procedures.

Calendar of key dates for the ViDA project

Here is the final ViDA timetable, adopted on 11 March 2025 by the Council of the European Union. The package of measures will be rolled out progressively until 2035.

📆2025 (20th day after publication of the directive)

• Prior approval by the Council of the EU is no longer required to set up a mandatory electronic invoicing system in a Member State.
  
  

📆1 January 2027

• The one-stop shop (OSS) is extended to cross-border energy supplies.
• Update of e-commerce rules.
  
  

📆1 July 2028

• The OSS is extended to transfers of own goods and domestic sales of B2C goods by VAT taxable persons not established in the Member State of consumption.
• The reverse charge mechanism is generalised.
• The ‘deemed supplier’ rule is initiated, on a voluntary basis, by accommodation platforms (short-term i.e. 30 nights maximum) or passenger transport services.
  
  

📆1 January 2030

• The ‘deemed supplier’ rule becomes mandatory for all short-term accommodation or passenger transport services.
  
  

📆1st July 2030

• E-invoicing and e-reporting become mandatory for intra-Community transactions (B2B and B2G).
• National e-invoicing and e-reporting regimes put in place after 2024 will all have to be aligned with the EU standard.

📆January 2035

• National e-invoicing and e-reporting schemes introduced before 2024 will all have to be aligned with the EU standard.

What are the impacts and challenges for enterprises?

Of the 3 pillars of the ViDA directive, electronic invoicing is certainly the most impactful. What should we bear in mind?

1-The exchange of electronic invoices will intensify:

Why? Because ViDA introduces 3 new elements that are essential to the widespread use of electronic invoicing.

• Simplification: from 2025, ViDA will enable Member States to impose their own electronic invoicing system for their national transactions, without prior approval from the EU Council! A clear time-saver for national reform timetables.
• Standardisation: by requiring the exchange of invoices structured in accordance with the EN16931 standard, and by paving the way for the 5-corner Peppol model (supplier, customer, issuing platform, receiving platform, tax platform), ViDA establishes a harmonised framework that should facilitate the widespread use of domestic and cross-border electronic invoicing within the EU.
• Obligation: once the directive comes into force (during 2025), the sending of a cross-border invoice in electronic format will no longer be subject to the customer's agreement. The customer will be obliged to accept it.
  
  

IMPACT AND RECOMMENDATION: companies must now be able to receive electronic invoices. Some countries (Italy, Germany, Romania, etc.) are already practising e-invoicing, while others (Belgium, France) are in the process of doing so.  Now is the time to ensure your Procure-to-Pay process is fully digitalised—if it isn’t already.”

2-The paper/electronic flow mix will nevertheless continue:

Why? Because not all ViDA deadlines are immediate, and none of them concern transactions outside the EU.

• Paper and electronic invoices will coexist until 2030:

It will be 5 years before the e-invoicing obligation applies to cross-border invoices within the EU. Until then, all formats will be able to continue to circulate.

• Coexistence of paper and electronic invoices even beyond 2030:

ViDA is for the EU and the EU alone. International transactions outside the EU (in particular with countries without a VAT system, such as the United States, Australia and New Zealand) will continue to be received in different formats beyond 2030 (paper, PDF or other electronic formats), depending on local regulations.

IMPACT AND RECOMMENDATION : Audit your invoice flows in the EU and beyond. It is essential to differentiate between E-invoicing Platforms on the basis of their ability to capture all your invoice flows, whatever their format, country of origin or distribution channel. 

Conclusion

The ViDA directive represents a major step towards European tax harmonisation.  The efforts currently being made by businesses to switch to electronic invoicing will therefore benefit both domestic and EU-wide trade. The return on investment will be significantly enhanced—especially with a well-chosen E-invoicing Platform. Now is the time to act!