VAT in the Digital Age (ViDA): What Sellers Need to Know

Understanding ViDA: The Next Phase After OSS & IOSS

In recent years, the EU has taken several steps to modernize VAT compliance for digital commerce. The 2021 VAT e-commerce package introduced OSS (One Stop Shop) and IOSS (Import One Stop Shop) to give sellers a way to declare VAT for multiple EU countries through a single online portal.

However, despite these improvements, sellers still face major challenges:

1. Multiple VAT registrations when storing goods in different EU countries
2. Different reporting formats and national systems
3. Manual VAT filing processes
4. Billions lost to VAT carousel fraud due to delayed data visibility

To solve these systemic issues, the European Commission launched ViDA — VAT in the Digital Age, adopted in March 2025. ViDA represents a full digital transformation of the EU VAT system, aiming to shift from post-filing compliance to transaction-level, real-time VAT transparency.

What Is ViDA (VAT in the Digital Age)?

The VAT in the Digital Age (ViDA) package is a major EU reform designed to modernize VAT compliance for digital commerce. ViDA consists of three pillars:

✅ Digital Reporting Requirements (DRR) – introduces real-time cross-border B2B VAT reporting based on e-invoicing

✅ Platform Economy Measures – in the short-term accommodation and passenger transport sectors, platforms will be treated as deemed suppliers for VAT purposes when certain users are not VAT-registered

✅ Single VAT Registration (SVR) – expands OSS/IOSS and introduces a new TOOG (Transfer of Own Goods) module to reduce the need for multiple VAT registrations

The goal is to create a harmonized, technology-driven VAT system, reducing fraud and simplifying compliance for cross-border businesses.

Key ViDA Timeline (2025–2035)

Source: IMPLEMENTATION STRATEGY - VIDA

Digital Reporting & E-Invoicing (DRR): Real-Time VAT Compliance

Under ViDA, e-invoicing becomes the default method for cross-border B2B transactions, and transaction data must be reported electronically and directly to tax authorities. This replaces current recapitulative statements/EC Sales List.

What Sellers Need to Prepare

1. Invoices must follow the EU standard for electronic invoicing
2. Structured data formats and system connectivity will become essential
3. Real-time or near real-time data exchange will replace delayed manual filings

✅ DRR marks the shift from periodic VAT declarations to continuous, digital VAT data exchange.

Platform VAT Rules – Limited Scope Under ViDA

From 1 July 2028 (or 1 January 2030 if delayed by a Member State), platforms facilitating short-term accommodation rental and passenger transport will become deemed suppliers for VAT when underlying suppliers are not registered or do not account for VAT.

⚠ Note: This rule only applies to short-term accommodation and passenger transport sectors. The ViDA document does not extend this mechanism to general e-commerce platforms such as Amazon or Shopify under this reform.

Single VAT Registration (SVR): Reducing Multi-Country VAT Registrations

The SVR initiative expands existing VAT simplification schemes and introduces new mechanisms to reduce administrative burdens.

Key Components

1. Expansion of OSS/IOSS to more B2C transaction types
2. Introduction of TOOG (Transfer of Own Goods) — allowing certain intra-EU stock movements to be reported through OSS instead of requiring separate VAT registrations
3. Mandatory reverse charge in specific cases — for example, when a supplier is not VAT-registered in the country of supply but the buyer is

⚠ Note: Reduction in VAT registrations depends on how a seller structures warehousing and supply flows. Not all scenarios qualify automatically.

How ViDA Will Affect Cross-Border Sellers

✅ Less fragmented VAT administration

✅ More transactions managed through single EU portals like OSS/IOSS

✅ Higher expectation for digital documentation and transaction traceability

⚠ VAT compliance becomes more technical – API/e-invoicing readiness is essential

Seller Action Checklist – Prepare Early

FAQ

Will I be able to avoid all EU VAT registrations under ViDA?

Not entirely. SVR reduces the number of required registrations only in defined cases, such as when TOOG reporting applies.

Is DRR optional or phased?

DRR for cross-border B2B is mandatory from 1 July 2030. Member States cannot opt out, but domestic alignment deadlines differ based on previous system implementation.

Will manual VAT reporting still be accepted?

Once DRR is active, real-time structured e-invoice data exchange becomes the standard, reducing the scope for manual or file-based declarations.

Do OSS and IOSS still matter?

Yes — ViDA strengthens and expands these schemes with additional coverage and technical improvements.

Final Take: ViDA Marks the Shift to Digital-First VAT Systems

ViDA is a strategic transformation of how VAT is administered in the EU. Instead of reporting VAT after transactions occur, the EU is moving toward real-time visibility, standardized electronic data, and streamlined digital registration frameworks.

1. Less repetitive VAT registrations — more central platforms (OSS/IOSS/TOOG)
2. Less paperwork — more API-based data exchange
3. Less fragmented national systems — more EU-wide alignment

VATAi – Your Reliable VAT Compliance Partner

As ViDA reshapes EU VAT compliance, sellers will need partners with not only tax expertise but also technological infrastructure to support API reporting, e-invoicing standards, and OSS/IOSS automation.

VATAi supports cross-border e-commerce sellers with:

1. Unified VAT compliance dashboard for multiple EU markets
2. OSS, IOSS registration & filing
3. API integration with Amazon and Shopify
4. Continuous monitoring of EU VAT policy updates
5. Dedicated account managers
6. Unlimited transactions

Speak to VATAi's VAT expert and prepare your business for the digital VAT era.

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