EU Member States Approve the VAT in the Digital Age (ViDA) Package
On 5 November 2024, ECOFIN approved the VAT in the Digital Age (ViDA) package setting new requirements across its three pillars: e-invoicing, single VAT registration, and platform economy VAT obligations, following the recent draft published on 30 October 2024. The package reflects recent compromises, including extended timelines and adjusted deemed supplier rules.
Estonia, which had previously opposed the deemed supplier rule due to its impact on VAT recovery for small and medium-sized businesses, supported the package this time. The new proposal introduces flexibility, allowing member states to exempt SMEs from the deemed supplier regime and extending the timeline for compliance to July 2030.
Timeline
Early 2025 with ViDA's Approval
- Member states can implement domestic e-invoicing without prior EU Commission authorization.
January 2027
- OSS extended to cross border energy supplies (natural gas, electricity, heating, and cooling).
July 2028
- OSS expanded to include all B2C supplies of goods and services and intra-EU stock transfers.
July 2030
- DRR/e-invoicing obligations for intra-EU transactions
- Harmonization of domestic DRRs introduced after Jan 2024
- Mandatory deemed supplier rule for platforms (optional from 1 July 2028).
January 2035
Harmonization of domestic DRRs introduced before January 2024
Impact
Following the approval of the ViDA package, the next step will involve a consultation with the European Parliament to reconcile differences between the original European Commission proposal and the text agreed upon by member states.
Businesses should begin evaluating their current systems and processes to ensure they can adapt to the new requirements.
