EARN NetworkEARN Network
Vienna, Austria, 26th May 2026
The VAT in the Digital Age (ViDA) package proposed by the European Commission came into force on 14 April 2025 following several years of debate, marking one of the most far-reaching reforms of the EU VAT system. The aim of this far-reaching reform is to adapt VAT rules to the digital economy, effectively combat cross-border tax fraud and reduce the administrative burden on businesses operating across borders. The package comprises three key areas, which are to be implemented in phases by 2035 and require businesses to make early strategic preparations.
The area with the most significant impact on the B2B sector is the introduction of mandatory Digital Reporting Requirements (DRR) in conjunction with electronic invoicing from 1 July 2030. The current summary report (ZM) will be replaced by a transaction-based, quasi-real-time reporting system. In future, E-Invoices for cross-border B2B transactions must comply with the uniform EU standard EN 16931. Consequently, unstructured electronic formats (image and PDF files) will no longer be permitted for these purposes. In addition, significantly shorter deadlines apply: invoices must be issued within ten days of the chargeable event occurring. The supplier must also transmit the invoice data to the tax authorities within this ten-day period. Furthermore, invoices must in future contain additional mandatory information, such as the supplier’s bank details (IBAN).
To significantly reduce the administrative burden on businesses, the ViDA package also provides for simplification through the so-called Single VAT Registration from 1 July 2028. This is intended to reduce the need for businesses to register for tax purposes in multiple EU countries. This will be achieved through a significant expansion of the One-Stop-Shop (OSS) procedure, via which intra-Community transfers of own goods and certain local B2C deliveries can also be reported in future. In return, the existing simplification scheme for consignment warehouses will be phased out by mid-2029. In parallel, the reverse-charge mechanism will be extended to cross-border B2B transactions where the foreign supplier is not established in the country of destination, but the recipient holds a VAT registration number there.
The implementation of the ViDA package poses significant operational challenges, particularly for SMEs. The new requirements make forward-looking planning and far-reaching adjustments to accounting and ERP systems absolutely essential. Businesses are required to upgrade their IT infrastructure so that it can generate and receive structured e-invoices and report transaction data automatically and on time.
During implementation, particular focus must be placed on ‘tax calculation’. As invoices must be issued within ten days at the latest, this requires all relevant data for correct VAT classification (e.g. service category, country of destination, VAT numbers) to be automatically recorded and maintained in the systems in advance.
Despite the initially high investment costs for software upgrades and staff training, the reform offers significant opportunities in the long term. The mandatory digitisation of invoicing can act as a catalyst for standardising and automating processes. Companies that address the new regulations at an early stage can thereby reduce their administrative costs, improve data quality and secure competitive advantages in the European single market through a proactive compliance strategy.
Authors: Kristina Maria Steflitsch, Johannes Zink, hba Rechtsanwälte GmbH, Vienna, Austria