What is ViDA? (VAT in the Digital Age)

ViDA, or VAT in the Digital Age, is an EU legislative package that updates VAT rules, the e-invoicing process of businesses, the platform Economy, and VAT registration. The package covers shared digital reporting rules for cross-border activities, adjustments to VAT registration simplifications, and updated VAT treatment for certain platform transactions. The consequences for SaaS and digital commerce businesses depend on the type of transactions, VAT registrations, and the ViDA pillar.

The three main elements of ViDA are:

• Digital Reporting Requirements (DRR) and e-invoicing: digitalization of invoices and structured reporting for cross-border B2B transactions that are relevant to a particular country, etc.
• The platform economy: deemed-supplier rules for platforms that facilitate short-term accommodation and land passenger transport where the real supplier hasn’t collected VAT.
• Single VAT Registration: One-Stop Shop mechanisms and reverse-charge rules can result in a decreased frequency of multiple VAT registrations.

The EU finance ministers agreed on ViDA politically in November 2024, and the Council formally adopted it on March 11, 2025. The regulations officially started on April 14, 2025, and they will be implemented until 2035.

EN 16931 describes a common semantic data model for the basic parts of an electronic invoice. It defines the business information that an e-invoice should contain and what each element means. A common file format is not a requirement of the standard. An update was published as EN 16931-1: 2026 in May 2026. The 2017 version was withdrawn, but it still complies while a transition/migration phase is being developed.

Peppol is a common framework for sharing standardized business documents using the Peppol access-point service and specifications. While it is often applied, ViDA does not make using Peppol compulsory for businesses or Member States. Peppol BIS Billing 3.0 is a Core Invoice Usage Specification that builds on EN 16931 and employs UBL for invoice exchange.

The obligations under ViDA and Digital Services Taxes are different. Via ViDA, the rules for EU-wide VAT reporting, levy, and tax collection are being updated, without implementing an additional tax or digital revenue from/outside the existing VAT system. DST is a separate tax whose levy may depend on the laws of the country/region imposing it and may be limited to certain types of digital activities. For example, the EU explored a common DST framework for specific digital service revenues; however, the DST and VAT continue to operate as distinct tax concepts.