EU Member States lost €89.3 billion in VAT revenues in 2022, according to the European Commission. Around a quarter of that loss stems directly from intra-EU transactions, where fragmented periodic reporting created the gaps that fraudulent activity can exploit. VAT in the Digital Age (ViDA) emerged as the EU's structural response. It is a legislative package adopted on March 11, 2025, entered into force on April 14, 2025, and rolling out progressively until January 2035. It applies to any business selling goods or services to EU customers, inside or outside the EU. Let's see how prepared the finance function is, and how much time remains to close that gap.
We will examine the three pillars of ViDA, the deadlines that matter most, and the steps finance and tax functions need to take now.
The three-pillar architecture
ViDA addresses three distinct gaps in the existing system.
e-Invoicing and real-time digital reporting
This is probably the most operationally significant pillar. It introduces mandatory e-invoicing and real-time digital reporting for all cross-border B2B transactions.
VAT liability
The VAT liability is extended to digital platforms facilitating short-term accommodation and passenger transport services, where the underlying supplier does not already account for VAT.
Unified compliance via the one-stop shop
The third pillar expands the One-Stop Shop framework, allowing businesses operating across multiple EU member states to meet their VAT obligations through a single registration portal rather than maintaining registrations in every jurisdiction where they trade.
Each pillar comes with separate deadlines and compliance obligations.
Phased implementation milestones
The ViDA rollout is not a single implementation event. It is a phased sequence, and different obligations apply at different points.
From April 2025, member states may introduce mandatory domestic e-invoicing without prior European Commission approval. Several have already moved. Spain, Lithuania, Italy, Sweden, the Czech Republic, and the Slovak Republic are all in various stages of transposing the first stage of ViDA into national law as of mid-2026, creating a patchwork of domestic obligations that predates the harmonised EU-wide mandate.
From July 2028, platform-deemed supplier rules come into effect for short-term accommodation and passenger transport. From July 2030, digital reporting requirements become mandatory for all intra-EU cross-border B2B transactions, requiring transaction-by-transaction reporting within five days of invoice issuance. The current maximum invoice issuance window of 45 days is reduced to 10 days. By January 2035, all member states' domestic digital reporting systems must align with the EU standard.
Digital reporting requirements
The DRR mandate is the pillar with the deepest reach. Under the current system, businesses submit periodic VAT returns and supplementary reports like EC Sales Lists on a retrospective basis. Under ViDA's DRR framework, every cross-border B2B transaction must be reported to the relevant tax authority in near real time, immediately after invoice issuance.
E-invoices will become the default format for intra-EU trade, structured to EN-compliant standards, with no buyer consent required. These are structured documents that require finance systems, ERP platforms, and AP and AR processes to handle, validate, and transmit standardised invoice data automatically at the point of transaction. All invoicing and related processes in accounts payable and receivable, along with the information systems supporting them, will need to be assessed and adapted.
The Commission estimates that mandatory e-invoicing will reduce VAT fraud by up to €11 billion per year and cut administrative and compliance costs for EU traders by over €4.1 billion annually over the next ten years. Overall savings in administrative costs are estimated at €51 billion over the 2025-2035 period, against a total implementation cost for businesses and national administrations of €13.5 billion. This cost-of-compliance investment yields a return only for organisations that implement it with sufficient lead time.
Single VAT Registration
Businesses that currently maintain VAT registrations across multiple EU member states can begin consolidating into the expanded OSS framework, reducing the administrative burden of multi-jurisdiction filings. The estimated savings from Single VAT Registration reach €8.7 billion in registration and administrative costs over ten years.
For multinationals managing complex cross-border trade flows, capturing operational efficiency in finance needs an assessment of which existing registrations to retain and which to consolidate. Maintaining registrations in some member states may still be preferable for cash flow reasons, given that input VAT recovery through non-resident refund claims is slower than recovery through a local VAT return.
What finance leaders need to do now
We can identify a framework for ViDA with five interdependent actions, all of which require finance, tax, and IT to work in concert.
- Process readiness assessment: Evaluate existing invoice processes and ERP configurations against the mandatory e-invoicing and DRR requirements applicable in each relevant jurisdiction.
- Master data governance: Ensure master data accuracy across all business units, applying a first-time-right discipline to VAT numbers, entity identifiers, and bank account data embedded in invoice records.
- Training and regulatory monitoring: Track member state-level transposition timelines, which vary, and train finance and tax teams on jurisdiction-specific requirements before they take effect.
- Solution selection: Select an e-invoicing platform capable of handling ViDA's structural requirements and the varying formats of member state domestic DRR systems simultaneously.
- Roadmap and operating model: Define the implementation sequence, RACI framework, and cross-functional governance model for system updates before the 2030 deadline.
How can Infosys BPM help with digital billing transformation for ViDA?
ViDA is a finance transformation project that spans process design, master data governance, ERP integration, and ongoing regulatory monitoring across multiple jurisdictions.
Infosys BPM provides digital billing transformation solutions, under the finance and accounting function, that bring together process expertise and financial risk compliance capabilities to help organisations build the operational infrastructure for ViDA.
Frequently asked questions
ViDA applies to any business selling goods or services to EU customers, whether or not it is established in the EU. Non-EU companies trading cross-border into the EU face the same e-invoicing and digital reporting obligations on those transactions. For global groups, this means assessing EU-facing trade flows regardless of where the selling entity sits.
They are related but distinct. E-invoicing is the issuance of a structured, EN-compliant electronic invoice as the default format for intra-EU trade. Digital reporting is the near-real-time transmission of that transaction data to the tax authority, within five days of issuance. E-invoicing creates the standardised document; digital reporting sends it to regulators.
From April 2025, member states can mandate domestic e-invoicing without prior EU approval, and several, including Spain, Italy, Lithuania, Sweden, and others, are already transposing early stages. This creates a patchwork of domestic rules that predates the harmonised 2030 EU mandate, so multinationals must handle varying national formats now while preparing for EU-wide alignment by 2035.
Non-compliance carries financial and operational exposure. Beyond penalties, businesses that cannot issue compliant e-invoices or report transactions in near real time risk blocked invoicing, delayed VAT recovery, and disrupted cross-border trade in affected jurisdictions. Because obligations phase in at different dates across member states, late preparation compounds the risk of falling out of compliance in multiple markets.
Digital reporting replaces the retrospective, periodic reporting of cross-border B2B transactions with transaction-level, near-real-time data. Some periodic obligations and domestic returns remain depending on the jurisdiction and transaction type, so ViDA reshapes rather than fully eliminates reporting. The practical shift is from batch submissions to continuous, invoice-level transmission at the point of transaction.
More than most expect, because the changes touch ERP configuration, master data, and AP and AR processes across jurisdictions. ERP upgrades and integrations in tax environments commonly take 18 to 24 months, and the mandatory 2030 digital reporting deadline is fixed. The Commission's savings only accrue to organisations that implement early, so planning should begin now.
ViDA applies to any business selling goods or services to EU customers, whether or not it is established in the EU. Non-EU companies trading cross-border into the EU face the same e-invoicing and digital reporting obligations on those transactions. For global groups, this means assessing EU-facing trade flows regardless of where the selling entity sits.
They are related but distinct. E-invoicing is the issuance of a structured, EN-compliant electronic invoice as the default format for intra-EU trade. Digital reporting is the near-real-time transmission of that transaction data to the tax authority, within five days of issuance. E-invoicing creates the standardised document; digital reporting sends it to regulators.
From April 2025, member states can mandate domestic e-invoicing without prior EU approval, and several, including Spain, Italy, Lithuania, Sweden, and others, are already transposing early stages. This creates a patchwork of domestic rules that predates the harmonised 2030 EU mandate, so multinationals must handle varying national formats now while preparing for EU-wide alignment by 2035.
Non-compliance carries financial and operational exposure. Beyond penalties, businesses that cannot issue compliant e-invoices or report transactions in near real time risk blocked invoicing, delayed VAT recovery, and disrupted cross-border trade in affected jurisdictions. Because obligations phase in at different dates across member states, late preparation compounds the risk of falling out of compliance in multiple markets.
Digital reporting replaces the retrospective, periodic reporting of cross-border B2B transactions with transaction-level, near-real-time data. Some periodic obligations and domestic returns remain depending on the jurisdiction and transaction type, so ViDA reshapes rather than fully eliminates reporting. The practical shift is from batch submissions to continuous, invoice-level transmission at the point of transaction.
More than most expect, because the changes touch ERP configuration, master data, and AP and AR processes across jurisdictions. ERP upgrades and integrations in tax environments commonly take 18 to 24 months, and the mandatory 2030 digital reporting deadline is fixed. The Commission's savings only accrue to organisations that implement early, so planning should begin now.
