The ViDA initiative represents one of the most significant reforms to the EU’s Value-Added Tax (VAT) framework in decades, aiming to modernise the system, enhance efficiency for businesses, and strengthen fraud resilience in light of the growing digital and platform economy.

RF Report

On Tuesday, 28 October 2025, Commissioner Wopke Hoekstra hosted a strategic dialogue on the VAT in the Digital Age (ViDA) package in Brussels.

The ViDA initiative represents one of the most significant reforms to the EU’s Value-Added Tax (VAT) framework in decades, aiming to modernise the system, enhance efficiency for businesses, and strengthen fraud resilience in light of the growing digital and platform economy.

Purpose and Focus

Following the recent adoption of the ViDA package, the dialogue provided an opportunity to gather feedback from the business community and tax professionals. The objective was to ensure that the implementation of ViDA remains adaptable, practical, and responsive to stakeholder concerns.

Key discussion points included:

  • Avoiding fragmentation among Member States,
  • Supporting SMEs through simplified processes, and
  • Fostering continuous cooperation between businesses, Member States, and the European Commission.

Participants specifically addressed challenges related to:

  • Digital Reporting Requirements (DRR): The need for a harmonised data transmission model for e-Invoicing and reporting.
  • Platform Economy Rules: The consistent application of the deemed supplier regime.
  • Single VAT Registration: Enhanced coordination between VAT and Customs authorities for the Import One-Stop-Shop (IOSS).

Commissioner Wopke Hoekstra highlighted ViDA’s transformative potential, stating:

“ViDA is one of the most significant EU VAT reforms in decades, aiming to simplify and digitalise VAT processes amidst today’s economic realities. ViDA will have a large impact on the practices of both the business community and tax administrations. It is a complex package but it is vital. If properly implemented, ViDA will lead to tremendous savings by reducing compliance costs, increasing tax collection, and reducing tax fraud. With collaboration from Member States and the private sector, we can achieve a consistent and effective rule application.”

He further emphasised the importance of ongoing dialogue through technical meetings and various fora to ensure transparency and effective implementation of ViDA’s complex measures.

Key Components of  ViDA

The ViDA package consists of three main pillars designed to align the EU VAT system with the digital economy, combat VAT fraud, and simplify compliance procedures:

  1. Digital Reporting Requirements (DRR):
    • Mandates e-Invoicing and near real-time digital reporting for intra-EU transactions.
    • Effective from 1 July 2030.
  2. New VAT Rules for the Platform Economy:
    • Platforms facilitating short-term accommodation or passenger transport services will, under specific conditions, be responsible for collecting and remitting VAT.
  3. Single VAT Registration (SVR):
    • Expands the One-Stop Shop (OSS) concept to further simplify cross-border VAT compliance.
    • Reduces the need for multiple VAT registrations across EU Member States.

Expected Impacts

The ViDA reforms are expected to:

  • Streamline VAT compliance and reduce administrative burdens, particularly for SMEs.
  • Enhance fraud prevention mechanisms and improve tax collection efficiency.
  • Close tax loopholes to ensure fair competition in the digital marketplace.

According to Commission estimates, the reforms could help Member States collect up to EUR 18 billion more in VAT revenues annually over a ten-year period, including EUR 11 billion from anti-fraud measures alone.

Participants

The meeting brought together 38 key stakeholders, including representatives from:

  • International large, small, and medium-sized enterprises,
  • Trade associations, and
  • Tax advisors.

These stakeholders reflected the broad scope of the measures and represented sectors such as e-commerce, short-term accommodation rental, passenger transport platforms, delivery services, financial technology, technical manufacturing, telecommunications, and software development.

The strategic dialogue highlighted the collaborative approach necessary to implement ViDA effectively. Through active engagement with stakeholders, the European Commission aims to deliver a modern, fair, and digitally integrated VAT system that supports innovation, reduces compliance costs, and enhances fiscal integrity across the Single Market.