ViDA (VAT in the Digital Age) is the EU package harmonising e-invoicing and digital VAT reporting across Europe. Read about the three pillars and impact.
ViDA stands for VAT in the Digital Age, the most far-reaching EU legislative package for VAT since the introduction of the current VAT system. The package was adopted by the European Council on 11 March 2025 and will be implemented in phases until 2035.
The objective is clear: modernise European VAT legislation for the digital era. Currently, EU member states miss out on billions in VAT revenue each year due to fraud and inefficient processes. ViDA addresses this by mandating the digital, standardised exchange of invoice data, allowing tax authorities to monitor in real time rather than checking retrospectively.
The ViDA package was published in the Official Journal of the EU on 25 March 2025 and consists of three legal texts: Directive EU 2025/516 (amending the VAT Directive), Regulation EU 2025/517 (administrative cooperation) and Implementing Regulation EU 2025/518 (information requirements).
The expected impact is significant. The European Commission estimates the total economic benefits of ViDA at EUR 172 to 214 billion over ten years, including EUR 51 billion in savings for businesses. Member states can expect up to EUR 18 billion in additional VAT revenue per year, of which approximately EUR 11 billion through more effective fraud prevention. Compliance costs for businesses drop by more than EUR 4,1 billion per year. For context: the VAT Gap (the difference between expected and actually collected VAT revenue) in the EU amounted to EUR 99 billion in 2020.
ViDA consists of three pillars, each digitalising a different aspect of VAT compliance. Together they form a coherent package that fully digitalises the VAT chain from invoicing to reporting.
This is the core of ViDA for anyone involved in e-invoicing. From 1 July 2030, businesses must issue a structured e-invoice based on the EN 16931 standard for cross-border B2B transactions within the EU. Simultaneously, a summary of the invoice data is automatically sent to the tax authority.
This replaces the current EC Sales List (Intracommunity Transactions) and enables real-time matching of sales and purchase transactions between member states.
Read more about e-invoicing and DRR
ViDA simplifies cross-border VAT registration by expanding the OSS/IOSS system (One Stop Shop / Import One Stop Shop). Businesses operating in multiple EU countries will in principle only need to register for VAT in one member state.
Additionally, online platforms become liable for VAT on transactions they facilitate, specifically short-term accommodation rental and passenger transport.
The background: platforms like Airbnb and Uber facilitate millions of transactions, but individual providers (hosts, drivers) do not always remit VAT. This leads to unfair competition with traditional businesses that do pay VAT, and to lost VAT revenue for member states. ViDA makes platforms themselves responsible for collecting and remitting VAT when their users fail to do so.
Read more about Single VAT Registration and the platform economy
The underlying philosophy of ViDA is the shift from periodic VAT checks to continuous transaction controls: tax authorities receive invoice data in real time or near-real time, rather than via quarterly or annual returns. Several EU countries already apply their own models for this.
Read more about continuous reporting and CTC models
For businesses that invoice cross-border, ViDA fundamentally changes the playing field. Where e-invoicing was already mandatory for government suppliers (B2G) in many countries, it now also becomes the norm for B2B transactions. Businesses already working with Peppol and EN 16931 have a head start: their invoice formats already comply with the standard that ViDA prescribes.
For software vendors and ERP integrations, ViDA means that systems must be able to generate and receive structured e-invoices. Integration with the Peppol network becomes indirectly necessary through the reporting obligation.
The market is moving towards Peppol as the de facto standard. Although ViDA does not contain a formal Peppol mandate, the Peppol 5-corner model (with the tax authority as the fifth corner) is the most efficient channel for meeting ViDA obligations. In January 2026, a study by EY commissioned by the Dutch Ministry of Finance concluded that Peppol is the recommended infrastructure for both e-invoicing and digital reporting in the Netherlands. The Dutch government confirmed that a public consultation on the draft legislation will take place in Q4 2026.
The ViDA milestones impact different groups:
Following ViDA's formal adoption, the European Commission immediately began preparing for implementation. On 24 September 2025, the Commission published an Implementation Strategy with a roadmap and concrete action items for businesses and member states. The strategy outlines the necessary steps per pillar and how ViDA fits within the EU's broader digital policy.
On 28 October 2025, Commissioner Wopke Hoekstra hosted an Implementation Dialogue with 38 stakeholders from business, industry associations and the tax advisory sector. Key themes in the discussion were the need for a harmonised DRR transmission model (to prevent member states from each developing their own reporting format), the impact on SMEs, and a harmonised application of the deemed supplier regime for platforms.
The PSB (Peppol Service Bus) of eConnect is designed with ViDA compliance in mind. In practice, little changes for customers: the PSB handles DRR reporting automatically as soon as the obligation takes effect. Your invoicing process stays the same; the additional reporting to tax authorities runs behind the scenes.
Want to know if your organisation is ready for ViDA? Get in touch for a compliance check.
Start with e-invoicing