The landscape of VAT compliance in Europe is undergoing a seismic shift. The ViDA (VAT in the Digital Age) proposal, approved on March 11, 2025, signals a new era for multinational companies. This landmark initiative aims to modernize and streamline VAT processes across the EU, primarily through the widespread adoption of e-invoicing and digital reporting. While this promises greater efficiency and transparency, it also presents significant challenges for businesses operating across multiple European nations.
The three pillars of ViDA
The ViDA proposal rests on three key pillars:
- E-Invoicing and Digital Reporting Requirements: This pillar focuses on real-time digital reporting of VAT transactions, mandating cross-border e-invoicing to ensure accuracy and reduce fraud. Restrictions on e-invoicing will be removed, paving the way for full digital adoption.
- Single VAT Registration in the EU: ViDA simplifies VAT compliance by allowing businesses to register for VAT only once across the entire EU, streamlining operations and reducing administrative burdens.
- Enhanced Rules Around Digital Platforms: The rules ensure VAT is correctly applied to transactions facilitated by online platforms, making platforms responsible for VAT collection and remittance.
The e-invoicing revolution: Obligations and timelines
The most immediate impact of ViDA will be on the world of e-invoicing. The proposal mandates that all cross-border transactions must be electronically invoiced and reported in near-real-time with the objective of streamlining VAT reporting and reducing fraud.
A key change is the removal of the “buyer acceptance” principle, which previously allowed buyers to refuse electronic invoices. This restriction has hindered the widespread adoption of e-invoicing and prevented countries from mandating it nationally. With these restrictions lifted, countries are expected to implement e-invoicing mandates more rapidly.
While the directive sets a deadline of July 1, 2030, for full integration of e-invoicing and digital reporting requirements into national legislation, many countries are expected to implement these changes much sooner.
The challenges for multinationals
Multinational companies face a complex challenge. With approximately ten EU member states already implementing their own e-invoicing mandates and the remaining seventeen expected to follow, businesses can anticipate dealing with an average of three to four new e-invoicing mandates per year until mid-2030. Given that implementing a single e-invoicing mandate can take enterprises up to two years, this represents a significant burden on resources.
OpenText’s commitment to ViDA compliance
As a leading provider of global e-invoicing services, OpenText is committed to supporting businesses through these changes. The OpenText Trading Grid e-Invoicing solution is already equipped to manage e-invoicing regulations in over fifty countries. OpenText provides a managed services approach to e-invoicing, offering an end-to-end solution that includes evaluating readiness and supporting integrations with internal systems, external stakeholders, and national e-invoicing portals, as well as maintaining ongoing compliance with any changes that follow.
The approval of the ViDA report marks a monumental step towards a more efficient and transparent VAT system in Europe. While the transition presents challenges, it also offers opportunities for businesses to streamline their operations and reduce costs. Companies that proactively prepare for these changes will be best positioned to thrive in the new digital landscape. Stay tuned for further updates as the ViDA proposal is implemented and its impact unfolds.
Learn more about OpenText’s OpenText Trading Grid e-Invoicing.
