ViDA implementation strategy

European Commission ViDA implementation strategy

3 October 2025| CATEGORIES: e-invoicing, Platform economy, Single VAT registration, VAT in the Digital Age, VIDA| TAGS: , ,

The European Commission has published its implementation strategy for the VAT in the Digital Age (ViDA) package, presenting actions to support businesses and Member States with the practical implementation of the requirements.

Background

The ViDA package is a set of three legislative acts (amendments to the VAT Directive, the Regulation on administrative cooperation, and the Council Implementing Regulation) and is intended to modernise the EU’s VAT system, make it work better for businesses and be more resilient to fraud, and address the challenges in VAT raised by the development of the platform economy.

It consists of 3 pillars:

  • Pillar 1 introduces new digital reporting requirements,
  • Pillar 2 addresses challenges in the platform economy sector with specific VAT adaptations, and
  • Pillar 3 develops a more streamlined single VAT registration process.

For more information on each pillar see our earlier blog articles here, here and here.

What does the implementation strategy cover?

The implementation strategy provides a roadmap with key action points and dates, ensuring coordinated and effective application. By closely monitoring the integration of ViDA with other legislative efforts, the Commission seeks to fully realise the benefits of a modernised VAT system and strengthen the Single Market.

In order to facilitate a level playing field across Member States, the correct and timely implementation of the ViDA package will require close cooperation between all stakeholders, along with the political ownership of the implementation process. Therefore, the Commission will actively engage with Member States, businesses and EU institutions (Parliament and Council) throughout the implementation process of ViDA.

The Commission will organise regular high-level dialogues with businesses to discuss the progress of the implementation process and highlight any hurdles.

At a technical level, engagement with Member States will continue through the VAT Committee, the Group on the Future of VAT (GFV), the Standing Committee on Administrative Cooperation (SCAC) and its Expert Group (SCAC-EG), and the Standing Committee on Information Technology (SCIT). Businesses will also be engaged via the VAT Expert Group (VEG) and targeted meetings with stakeholders (as required).

The Commission will, in collaboration with Member States and businesses, develop detailed explanatory notes on each of the three pillars, the aim of which is to ensure that all stakeholders have the same understanding of how the legislation should be implemented.

Risks identified

The Commission has identified a number of potential risks for implementation as well as mitigation measures.  The main risks identified include:

  • IT readiness: Some Member States may struggle with system upgrades, data format standardisation and real-time reporting infrastructure. Businesses will need to have upgraded invoicing / ERP systems in place by the relevant deadlines.
  • Interoperability & consistency issues: Without consistent standards, different MS might adopt different formats, timelines and national deviations which complicate cross-border trade.
  • Legislative transposition complexity: Delays might occur in national parliaments with transposition of the ViDA directive into national law.
  • Business awareness: Businesses may be unaware of the changes or uncertain about what exactly will be required.
  • Resource implications: Significant investment will be required for both tax administrations and businesses, e.g. costs of system upgrades, staff training, compliance monitoring.
  • Risk of uneven adoption / “gold-plating”: Some Member States may go beyond minimum requirements, leading to divergence. Also, there will be a lack of harmonisation if some Member States delay measures (e.g. use of deemed supplier rules until 1 Jan 2030).

Benefits of ViDA

The Commission has stated that the ViDA package is expected to generate substantial benefits, ranging between €172 billion and €214 billion over a decade, including €51 billion in savings for businesses.

EU businesses should be prepared:

  • to engage with software developers early in order to invest in and implement ViDA compliant ERP/e-invoicing systems in a timely manner,
  • monitor transposition of the ViDA requirements into national legislation, and
  • train staff on the new requirements.

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