On March 11, 2025, the Council of the EU adopted the final package of reforms under VAT in the Digital Age (ViDA), a landmark move set to accelerate the global shift to mandatory e-invoicing and real-time digital reporting.
With more than 99 countries already progressing toward structured invoice requirements (and 140 expected by 2030), multinational businesses are under increasing pressure to adapt. Navigating evolving e-invoicing mandates across Finance, Tax, and IT functions is now a critical task.
This article answers the most pressing questions about ViDA, what it means for your business, and how to prepare for the future of digital tax compliance.
What is ViDA?
VAT in the Digital Age (ViDA) is a reform package developed by the European Commission to modernize VAT collection, reduce fraud, and support cross-border digital trade. ViDA introduces three major changes:
Real-Time Digital Reporting to Reduce VAT Fraud
ViDA introduces real-time digital reporting for cross-border transactions, using structured e-invoicing. This change is expected to cut VAT fraud (especially carousel fraud) by up to €11 billion annually, while saving EU traders over €4.1 billion in administrative and compliance costs over the next decade. It also encourages long-term convergence of national reporting systems across the EU and supports countries that want to roll out digital reporting for domestic trade.
Clear VAT Rules for the Platform Economy
Online platforms offering short-term accommodation or passenger transport will now be responsible for collecting and remitting VAT when their users don't, such as small businesses or individuals. These updates create consistency across EU countries, ease the compliance burden on SMEs, and level the playing field between digital platforms and traditional service providers.
Simplified VAT Registration Through One Stop Shops
ViDA expands the scope of the VAT One Stop Shop (OSS), making it easier for businesses selling to consumers in other EU countries to manage their VAT through a single online portal. It also proposes mandatory use of the Import One Stop Shop (IOSS) for certain platforms facilitating non-EU sales to EU consumers, helping improve VAT collection and streamline cross-border compliance.
Why Does ViDA Matter for Global Businesses?
E-invoicing is no longer optional.
What began as a cost-saving and automation tool is now becoming a legal requirement. Governments around the world are mandating real-time invoice reporting, shifting the point of audit from after the transaction to before submission.
Key Impacts:
- Non-compliance may block your invoices and delay payments.
- Tax authorities will have more insight into your transactions than ever before.
- Pre-filled VAT returns will become standard, reducing errors but increasing scrutiny.
Countries like Mexico, Brazil, and Chile pioneered this model more than a decade ago. Now Europe is catching up, with ViDA paving the way and countries like France, Belgium, and Poland moving quickly to implement national mandates.
Why Act Now If the ViDA Deadline is 2030?
While the 2030 deadline applies to cross-border B2B transactions, two critical changes are already in force:
- EU Derogation Removed – Member states no longer need EU approval to introduce domestic e-invoicing mandates.
- Buyer Consent Removed – E-invoicing can be mandated without needing customer agreement.
The result? Countries across Europe are accelerating their timelines. France, Belgium, Poland, Germany, and others are launching or expanding e-invoicing programs well before 2030.
Waiting is not a strategy. Delaying action risks non-compliance, business disruption, and missed opportunities for automation.
Why Are Governments Pushing for E-Invoicing?
Governments see structured e-invoicing as a powerful tool to:
- Close VAT gaps and reduce fraud
- Access real-time economic data
- Improve the accuracy of tax reporting
By shifting to pre-clearance or structured reporting, tax authorities gain full visibility into transaction-level data, enabling faster audits and enforcement.
Expect pre-filled returns and near-instant compliance checks to become standard across jurisdictions.
Which Countries Are Impacted by ViDA?
ViDA is an EU initiative, but its influence is global.
In the EU:
- France: Mandatory B2B e-invoicing from 2026
- Belgium: Mandatory B2B e-invoicing from 2026
- Poland: National mandate active from 2026
- Italy: Must phase out its clearance model by 2035
- Germany, Latvia, Slovenia: Preparing mandates
Globally:
- Latin America: Early adopters of clearance models
- India, Saudi Arabia, Singapore: Expanding digital tax programs
Even non-EU countries are monitoring ViDA closely to shape their own real-time compliance strategies.
Will ViDA Standardize E-Invoicing in Europe?
Not exactly.
ViDA sets out rules for cross-border digital reporting, but it does not harmonize domestic mandates across EU countries. That means each member state can adopt its own model, provided it meets ViDA’s principles.
What ViDA Requires:
- No clearance models that delay invoice processing (e.g., Italy must change)
- No barriers to trade between member states
- Full interoperability and structured formats for cross-border transactions
This framework gives countries flexibility with guardrails, a balancing act between innovation and standardization.
What is Peppol? and How Does It Fit Into ViDA?
Peppol (Pan-European Public Procurement Online) is a secure e-invoicing network designed for interoperability. It enables the standardized exchange of electronic documents between businesses and governments.
With ViDA discouraging government clearance models, many EU countries are adopting Peppol as a compliant, future-proof infrastructure.
Where Peppol is Growing:
- Active: Belgium, Denmark, Sweden, Norway
- Gaining ground: Germany, Latvia, Slovakia, Slovenia, Croatia
- Integrated into France’s model: Used for communication between PDPs (registered service providers)
Peppol is emerging as the de facto standard for secure and scalable e-invoicing across borders.
Webinar: 7 Crucial things to know about Peppol
What Happens If My Business Doesn’t Comply?
Failing to meet e-invoicing requirements can result in:
- Invoice rejections, leading to delayed or lost payments
- Increased audit exposure
- Operational disruption, especially for cross-border trade
- Strained supplier or customer relationships
The cost of inaction is rising. Compliance is now mission-critical.
What Should Businesses Do to Prepare?
7 Practical Tips for E-Invoicing Compliance in 2025 and Beyond
- Partner Up! Don’t Go It Alone. Managing diverse mandates in-house is costly and complex. Work with experienced compliance or tax technology providers.
- Go Beyond Compliance. Use mandates as a chance to automate and streamline invoice processes. Compliance keeps you legal; automation keeps you competitive.
- Be Proactive, Not Reactive. Waiting for mandates to drop leads to rushed rollouts and poor data quality. Start now with a clear roadmap.
- Use Mandates to Accelerate Digital Transformation. Take this as an opportunity to build a global invoicing framework that supports both current and future mandates.
- Digitize Your Supply Chain Early. The sooner you shift to electronic invoicing, the more value you unlock and the easier compliance becomes.
- Create a Global Invoice Template. Design one scalable, flexible template that accommodates multiple formats, flows, and local rules.
- Invest in Agility. E-invoicing is evolving rapidly. Your systems, partners, and people must be ready to pivot as new regulations emerge.
Final Thoughts: ViDA Is the Future of VAT Compliance
ViDA is more than a tax reform. It’s a signal that digital, real-time compliance is becoming the global norm.
Whether you're operating in the EU or managing international tax obligations, now is the time to:
- Assess your current invoicing capabilities
- Map out upcoming mandates
- Select scalable partners and technologies
- Build resilience for the next wave of regulatory change
Businesses that move early will not only stay compliant but gain long-term advantages in efficiency, visibility, and agility.