ViDA: what's it all about?

The ViDA directive (for VAT in the Digital Age), proposed by the European Commission, aims to adapt VAT systems to new market realities. It aims to harmonize practices, and respond to developments linked to the rise of new technologies and online commerce, to better combat tax fraud. It has three main components:

Electronic invoicing and e-reporting

This concerns the mandatory use of electronic invoicing for all transactions between member states. The aim of this measure is to standardize exchanges for greater security. Common e-reporting requirements and obligations are also introduced to limit fraud.

An electronic invoice is defined as a document issued, transmitted and processed in a structured electronic format enabling automated processing. Invoices must comply with the EN16931 semantic standard, to ensure format harmonization and interoperability.

Platform economy

Faced with the rapid growth of online platforms and other marketplaces, the directive proposes new rules to regulate these players in terms of VAT. They will become responsible for collecting VAT on transactions carried out via their services. However, no agreement has yet been reached on this aspect, due to a veto from Estonia.

One-stop shop extension

The directive also provides for the extension of the One Stop Shop. A company will be able to register once for VAT in one Member State and use this registration to declare and pay VAT in other EU countries. This reduces registration requirements, and is designed to simplify and optimize administrative procedures.

The main aim of the directive is to facilitate cross-border exchanges between member countries, while strengthening the fight against fraud. Thanks to automated and transparent transactions, the directive also guarantees greater efficiency in tax administrations.

What are the advantages of the ViDA directive?

The ViDA directive aims to bring a breath of fresh air to VAT management on a European scale. This has several advantages:

Simplified administration for businesses

One of the main aims of the ViDA directive is to make it easier for companies to meet their tax obligations. Thanks to electronic invoicing and e-reporting, they will benefit from an automated, standardized system. What's more, the One Stop Shop will enable companies to register once for VAT purposes in all member states. This considerably reduces administrative formalities.

Adapting to the digital age

Technological advances and the rise of e-commerce platforms have given rise to new forms of transaction. The ViDA directive provides a clear legal framework for these players, making platforms responsible for collecting VAT on transactions carried out through their services. This adaptation is essential to ensure that the tax framework is in line with market developments.

Smooth cross-border trade

Another significant benefit of ViDA is the improvement of cross-border exchanges. Through this modernization, systems will become interoperable. This will enable smoother communication of information between the various tax authorities, making transactions much easier! By optimizing data exchange between countries and harmonizing tax rules, this directive should reduce the complexity of exchanges and simplify the compliance process for companies.

Reducing fraud

VAT fraud represents a major loss for EU member states. By strengthening the traceability of transactions through electronic invoicing and the transmission of tax data, the ViDA directive will enable fraudulent behavior to be detected more quickly. Tax authorities will also have access to more precise and structured information, which will facilitate controls.

ViDA calendar: negotiations still ongoing

Since January 2024, e-commerce companies have been able to issue B2B electronic invoices without the customer's prior consent. This was introduced to simplify trade. EU states can now make e-invoicing mandatory without applying to the Commission for a derogation.

For the first part (electronic invoicing and DRR - continuous transactional control), the ViDA directive should then be implemented on July^1, 2030.

What's more, the Member States have yet to reach a final agreement on certain aspects of its application. Discussions are therefore still underway, particularly on the second aspect concerning the liability of digital platforms. The final timetable and certain deadlines have yet to be confirmed.

Anticipate and adapt with Freedz

For companies, it's essential to be as well-equipped as possible in order to prepare calmly for regulatory changes in electronic invoicing.

Freedz is a platform specialized in electronic invoice processing. By enabling companies to optimize their invoice management in a secure way that complies with legal requirements, Freedz is positioned as a key partner to help companies comply with the directive.

Thanks to its PDP registration, Neovacom, publisher of Freedz, has positioned itself as a key player in the digitization of invoicing processes for its customers in the property and construction sectors. Freedz offers a solution compatible with the new requirements, and also facilitates the integration of e-reporting, ensuring the transmission of tax information in real time.

Would you like to increase efficiency and productivity while reducing costs? Or simply want to learn more about our solution? Request a demo or contact our team.

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