When the European Commission declared its VAT in the Digital Age (ViDA) proposals, it signalled one of the most significant reforms to the EU VAT framework since the introduction of the Single Market. The initiative is not simply about digital reporting—it reshapes how businesses document transactions, manage platforms, and handle cross-border VAT obligations in a more integrated, technology-driven environment.
For tax, finance, IT, and procurement leaders, ViDA represents both an operational shift and a strategic opportunity: those who modernise early will gain stronger controls, cleaner data, and greater compliance assurance across their EU footprint.
What ViDA Aims to Achieve: A Quick Overview
The European Commission’s ViDA initiative is designed around three core objectives, validated through public consultations and impact assessments published on the EU Commission portal:
1. Modernise VAT reporting through real-time or near-real-time digital reporting systems (DRR).
The EU has identified fragmented reporting mechanisms across Member States. ViDA plans to introduce a common EU digital reporting standard for intra-EU B2B transactions, improving fraud detection and allowing faster verification.
2. Align VAT rules with the platform economy.
Platform operators—especially those enabling short-term accommodation and passenger transport—will take on an expanded deemed-supplier VAT role, ensuring transparency and consistent VAT management across jurisdictions.
3. Simplify VAT registration through an expanded One-Stop-Shop (OSS).
ViDA proposes the extension of OSS (One Stop Shop) and IOSS (Import One-Stop Shop) to reduce the need for multiple VAT registrations, making cross-border operations smoother for enterprises.
Following the phased rollout, the European Commission’s announcement outlines a multi-year implementation path, with measures taking effect progressively from 2025 through 2035, allowing businesses sufficient preparation time.
Key Pillars & Regulatory Deadlines (2025–2035)
Based on the European Commission’s ViDA proposal and explanatory notes, the framework stands on three pillars:
1. Digital Reporting Requirements (DRR)
- Introduction of a Europe-wide standard for e-Invoicing and digital reporting for intra-EU B2B transactions.
- Member States may implement real-time or near-real-time systems, but the structure must align with the EU-defined schema.
- Mandatory e-Invoicing for intra-EU supplies becomes the mandate, replacing the need for summary reports.
2. Platform Economy Rules
- Platforms enabling accommodation or transport services will act as deemed suppliers when underlying suppliers fail to charge VAT correctly.
- Harmonised obligations ensure consistent data reporting, VAT visibility, and compliance across borders.
3. Expansion of the One Stop Shop (OSS) Framework
- Extension of OSS to additional B2C supplies of goods and services.
- Single VAT registration intended to cover more cross-border activities, reducing compliance overhead for multi-jurisdiction businesses.
- Full rollout expected by 2035, according to projected EC timelines.
The progressive deadlines mean enterprises must begin aligning their tax technology, invoice flows, and ERP processes well before mandatory requirements take force.
How ViDA Impacts Finance, AP, Procurement, and IT Teams
ViDA is not a regulatory change restricted to tax teams—it redefines how organisations capture, validate, transmit, and records transactional data.
1.For Finance & Tax Teams
- Shift toward real-time or near-real-time VAT reporting significantly reduces acceptance for errors and incomplete data.\
- VAT position depends on invoice-level accuracy, making master data governance more critical than ever.
- Expanded OSS/IOSS rules require re-assessment of cross-border VAT determination logic.
2. For Accounts Payable
- Mandatory e-invoicing and standardised reporting impact invoice ingestion, validation, and posting workflows.
- AP teams must ensure vendor invoices include correct VAT clasification, exemptions, and cross-border indicators.
3. For Procurement
- Vendor onboarding must account for VAT classification, platform obligations, and supply-chain visibility.
- Contracting processes will require tighter alignment with new platform-economy VAT rules.
For IT & ERP Leaders
- ERP ecosystems must adapt to new EU e-invoicing schema versions and digital reporting APIs.
- Integrations should be built to adapt smoothly as ViDA requirements evolve, ensuring compliance without repeated system overhauls.
- Archival and audit capabilities will need enhancement to meet stricter digital record-keeping standards.
Across all functions, the biggest shift is cultural: data accuracy becomes non-negotiable, and system-first compliance becomes the norm.
Role of Advisory Services:
Advisory support plays a central role in helping organisations interpret ViDA’s regulatory requirements and translate them into operational changes. As ViDA affects tax, finance, AP, procurement and IT functions, expert guidance ensures consistent understanding of digital reporting rules, platform obligations and OSS expansion. Advisory services help establish governance, assess data readiness, review VAT logic and redesign processes to support real-time reporting and mandatory e-invoicing.
Role of Automation:
Automation is becoming essential as ViDA shifts VAT compliance toward continuous, structured and data-driven reporting. Digital tools enable invoice-level validation, correct VAT classification, schema-compliant e-invoicing and automated cross-border VAT determination. Automation reduces the risk of manual error, supports large transaction volumes and ensures systems can meet the speed and accuracy thresholds required under DRR and future EU reporting standards.
Integration of Advisory & Automation
Successful ViDA readiness requires both regulatory alignment and technological capability. Advisory inputs define how rules should apply within an organisation’s supply chains, systems and processes, while automation embeds these rules into day-to-day operations. When combined, they create a compliance model where policy interpretation, data accuracy, system logic and reporting outputs operate together, enabling businesses to adopt ViDA requirements in a controlled and scalable manner.
A Practical, Structured Roadmap to Prepare for ViDA
Advisories across the EU are encouraging enterprises to begin ViDA readiness at early stage. A strong roadmap blends regulatory interpretation with technology enablement, ensuring systems and processes evolve together.
1. System & Process Audit (Advisory + IT Review)
The starting point is understanding how ViDA affects your business—both from a policy and systems perspective.
This includes:
- Reviewing VAT determination rules, supply classifications, and exemptions.
- Assessing data readiness across suppliers, customers, and invoices.
- Mapping ERP and invoicing workflows against DRR and e-invoicing specifications.
This combination ensures clarity on what must change before implementation.
2. Gap Analysis (Policy Gaps + System Gaps)
A coordinated review highlights:
- Weaknesses in master data governance and cross-border VAT treatment.
- Inconsistencies in transaction coding and invoice flows.
- Readiness of the organisation’s systems to support near-real-time reporting and structured e-invoicing.
The outcome is a clear list of remediation actions for both tax and IT teams.
3. Technology Evaluation & Selection (Driven by Advisory Requirements)
Regulatory needs must guide system selection. Enterprises assess:
- Platforms that support EU-aligned e-invoicing, DRR schemas, OSS reporting, and audit trails.
- Integration with existing ERPs, procurement systems, and AP automation.
- Capabilities for automated validations, multi-country tax logics, and scalable reporting engines.
This ensures the chosen technology operationalises advisory insights effectively.
4. Change Management & Training (Digital-First Compliance)
Teams must adapt to ViDA’s shift toward continuous, structured reporting.
This phase covers:
- Training tax, AP, procurement, and IT teams on new obligations.
- Updating SOPs for real-time validations and audit-ready invoice processes.
- Embedding new controls that reflect both regulatory and system changes.
5. Parallel Testing & Phased Adoption (Advisory + IT Alignment)
Testing ensures rules, data, and system outputs align:
- Pilot cycles for DRR submissions, schema accuracy, and exception handling.
- End-to-end testing of invoice capture, VAT logic, reporting, and reconciliation.
- Preparing documentation and audit trails for internal and regulatory reviews.
A phased rollout reduces disruption while improving accuracy and confidence.
Where Advisory Insight and Automation Come Together
ViDA demands reliable data, standardised invoice flows, and timely reporting—requirements that cannot be met with manual processes alone.
Advisory expertise ensures correct interpretation of upcoming EU rules, while technology ensures those rules are applied consistently across volumes, markets, and systems
Platforms such as Cygnet.One already support enterprises with EU-compliant e-invoicing, DRR workflows, master-data validation, and multi-country VAT automation, while TPA Global brings the regulatory interpretation, cross-border VAT expertise, and advisory governance needed to apply ViDA rules correctly. Together, this combination of technology-backed automation and specialist tax advisory enables businesses to build a ViDA-ready compliance model that is accurate, scalable, and future-proof.