On March 11, 2025, the Council of the European Union officially adopted the measures of the VIDA (VAT In the Digital Age) package, marking a significant step forward in modernizing the EU VAT system. This decision follows the approval of the European Parliament on February 12, 2025.
The VIDA package aims to simplify and harmonize tax obligations for businesses operating in the European Union, particularly regarding VAT. Here are the main reforms and their implementation schedule:
Adjustments to the OSS and IOSS Regimes (January 1, 2027)
Starting January 1, 2027, minor adjustments and clarifications will be made to the One Stop Shop (OSS) and Import One Stop Shop (IOSS) regimes to optimize their functioning and enhance their efficiency for businesses.
Simplification of VAT Reporting Obligations (July 1, 2028)
As of July 1, 2028, several simplification measures will come into force:
Extension of the OSS regime:
Domestic sales of goods to private customers (B2C) will now be included in the One Stop Shop system, simplifying procedures for businesses.
Mandatory reverse charge mechanism for VAT:
Submit your quarterly CBAM reports through the European Commission portal.
OSS regime for stock movements:
A new system will allow businesses to avoid VAT registration when declaring transfers of goods to another Member State.
Electronic Invoicing and E-Reporting Obligations (July 1, 2030)
Finally, starting July 1, 2030, the European Union will implement mandatory electronic invoicing and e-reporting requirements. This reform aims to enhance tax transparency, combat fraud, and modernize VAT reporting procedures.
A Major Turning Point for European Taxation
The VIDA package represents a major reform that is expected to facilitate VAT management for businesses while strengthening the coherence of the European tax system. Its adoption marks a key step towards a harmonized and simplified digital tax framework, benefiting both tax authorities and companies operating within the single market.
