Key Takeaways

• The VAT in the Digital Age (ViDA) initiative will transform EU VAT reporting through e-invoicing and digital reporting
• 2025–2027 marks the early implementation phase across EU Member States
• Businesses should prepare for real-time or near real-time VAT reporting
• Key changes include e-invoicing, Digital Reporting Requirements (DRR), and OSS/IOSS updates
• Early preparation reduces compliance risks and supports a smoother transition

Introduction

The VAT in the Digital Age (ViDA) initiative represents a major transformation of the European Union’s VAT framework. It aims to modernize and digitalize VAT reporting through mandatory e-invoicing, real-time digital reporting requirements, and updated rules for the platform economy.
The period from 2026 to 2027 marks a critical phase, as early implementation measures begin and obligations gradually expand across Member States. Businesses operating across borders should assess their current VAT setup, identify gaps, and prepare internal processes to ensure compliance.

What Is ViDA and Why It Matters Now

ViDA establishes a unified European framework for VAT compliance by introducing:

• Mandatory e-invoicing
• Digital Reporting Requirements (DRR)
• Updated rules for the platform economy

These measures aim to improve transparency and enable near real-time monitoring of cross-border transactions.
Companies engaged in international trade will need to adapt accounting systems, ERP solutions, and reporting workflows. Early preparation helps reduce compliance risks and ensures alignment with the EU’s evolving digital VAT infrastructure.

What the EU ViDA Timeline Looks Like

2025: Preparation Phase

Following the adoption of the ViDA package, Member States obtained the legal framework to prepare for implementation.

During this phase:

• Authorities reviewed existing VAT procedures
• Planning for e-invoicing and digital reporting began
• Businesses could assess upcoming changes
  No binding operational requirements applied at this stage.

2026: Early Implementation

In 2026, several EU Member States begin initial measures aligned with ViDA objectives, focusing on digital reporting and e-invoicing readiness.

This phase allows businesses to:

• Monitor national compliance requirements
• Begin adapting internal systems
• Anticipate operational impact
• Reduce future compliance risks

Examples of National Implementation

Several Member States have already introduced or announced concrete measures:

• Germany: Obligation to receive e-invoices is in effect, with phased sending obligations starting from 2027
  While implementations vary, this stage helps companies prepare for broader obligations.
• Belgium: Mandatory B2B e-invoicing via Peppol standards is operational
• Poland: National e-invoicing system (KSeF) becomes mandatory, phased from 1 February and 1 April 2026
• Greece: E-invoicing through the myDATA platform applies to large taxpayers from March 2026
• France: E-invoicing requirement for large and medium enterprises begins in September 2026

2027: Expanded Obligations

In 2027, EU Member States are expected to continue the gradual implementation of ViDA-related measures, as national transpositions of the legislative framework advance.
This phase may introduce additional obligations affecting multiple areas:

1. Extension of the deemed supplier provision for online platforms and certain exempt or small enterprise schemes, clarifying VAT responsibilities in cross-border transactions.
2. Phase-out of call-off stock arrangements for pre-existing stock, requiring standardized reporting for stock movements.
3. Cash accounting restrictions for OSS schemes, enforcing accrual-based recognition for Union and Non-Union OSS.
4. Mandatory application of standard chargeable event rules under OSS/IOSS, aligning VAT recognition with the delivery of goods or performance of services.
5. New requirements for tax representatives and refund processes, defining responsibilities for cross-border VAT recovery.
6. Exclusion of Small Enterprises from IOSS, alongside additional transaction-level security measures for reporting.
7. Inclusion of energy supplies (gas, electricity, heat) in Union OSS reporting until 2028.
8. €10,000 annual threshold limited to intra-community distance sales from the Member State of establishment.
9. Automatic place-of-supply adjustments under OSS for low-threshold supplies.
10. Simplified registration requirements for Non-Union OSS, removing the website provision obligation. Non-Union OSS registration requirements

Longer-Term ViDA Rollout

Beyond 2027, the ViDA implementation continues in several key phases:

• From 1 July 2028, expanded OSS measures and mandatory reverse charge rules for certain non-established suppliers are expected to apply
• By 1 July 2030, structured e-invoicing and Digital Reporting Requirements (DRR) are expected to become mandatory for intra-EU B2B transactions
• By 1 January 2035, Member States with pre-existing national digital reporting systems are expected to fully align with harmonized EU standards

These milestones reflect the transition toward a fully integrated digital VAT system across the EU.

How Early ViDA Implementation Works in Practice

ViDA implementation follows a structured approach:

1. The EU defines the regulatory framework and reporting standards
2. Member States transpose rules into national legislation
3. Businesses adapt ERP systems, accounting tools, and workflows
4. Reporting evolves toward near real-time submissions

This phased approach allows companies to manage compliance while maintaining operational continuity

Before vs After ViDA: What Changes for Businesses

The shift from traditional VAT reporting to ViDA-driven processes can be summarized as follows:

Area	Without ViDA (Current State)	With ViDA (Future State)
Reporting	Fragmented across Member States	Standardized EU-wide reporting
Timing	Periodic submissions	Real-time or near real-time reporting
Processes	Manual and partially paper-based	Automated digital workflows
Visibility	Delayed transaction visibility	Immediate or near real-time visibility
Reconciliation	Manual and complex	Automated and streamlined
Compliance Risk	Higher risk of errors and penalties	Reduced risk through standardization
Operations	Disconnected systems	Integrated and aligned workflows

Who Should Prepare

Most impacted:

• Multinational companies
• E-commerce platforms and operators
• Cross-border traders
• Businesses with complex VAT structures

Less impacted initially:

• Small domestic businesses
• Single-country operations
• Businesses with simple VAT structures

However, all businesses should monitor developments as obligations expand.

Requirements and How to Prepare for ViDA

To prepare effectively, companies should:

• Review current VAT processes and reporting workflows
• Conduct a gap analysis against ViDA requirements
• Assess ERP and IT system readiness
• Ensure capability for real-time data capture and reporting
• Develop a structured implementation roadmap

This approach enables a smooth transition without disrupting ongoing operations.

How Gerlach Customs Supports Your ViDA Preparation

Gerlach supports companies through:

• VAT audits and gap analysis
• Strategic VAT planning
• Guidance on e-invoicing and OSS/IOSS requirements
• Monitoring national implementation across Member States

This ensures businesses remain aligned with evolving requirements and can integrate ViDA into both VAT and cross-border operations.

Frequently Asked Questions about ViDA

Do we need to act now or wait until 2027?

Early preparation is strongly recommended. While full ViDA obligations will be introduced gradually, companies should already assess their current VAT processes, reporting workflows, and system capabilities. Identifying gaps early allows businesses to plan system updates, align internal processes, and avoid last-minute implementation challenges once requirements become mandatory.

Will ViDA apply in all EU countries at the same time?

ViDA establishes a harmonized EU framework, but implementation timelines will vary by Member State. Each country must transpose the rules into national legislation, meaning that scope, timing, and technical requirements may differ. Businesses operating in multiple countries should monitor local developments closely and prepare for a phased rollout.

How complex is implementation?

Implementation can be complex, particularly for companies with cross-border transactions, high volumes of invoices, or integrated ERP systems. Businesses will need to adapt accounting systems, enable e-invoicing capabilities, and ensure that data can be reported in near real-time. The level of complexity depends on the size of the organization and the number of jurisdictions involved.

Are small domestic businesses immediately affected?

Companies operating within a single Member State and with simple VAT structures are generally less impacted in the early phases. However, as EU VAT reporting becomes more harmonized, some obligations may expand. Smaller businesses should stay informed and assess potential future impacts.

What are the main benefits of preparing early?

Preparing early helps reduce compliance risks, avoid penalties, and ensure a smoother transition to digital VAT reporting. It also improves operational efficiency through automation, increases data accuracy, and provides better visibility over VAT positions.