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For the past few years, most of the discussion has been about direction, what the EU is trying to achieve and how the three pillars fit together. That part is now largely settled.
What’s happening now, based on the recent expert group discussions, is much more practical: working out how all of this will actually function.
And that’s where things are getting complicated.
There is clear progress across all three pillars. Draft Explanatory Notes are circulating, technical standards are being refined, and timelines are still broadly intact. But as the detail develops, differences in interpretation and approach between Member States are becoming more visible.
The concern isn’t that ViDAViDA or 'VAT in the Digital Age', is an EU initiative proposed by the European Commission that seeks to modernise and harmonise VAT processes for member states, by embracing new technologies. It is aimed at updating processes for the management of VAT, and reduce the VAT gap and fraud. The proposal also aims to address challenges in the area of VAT raised by the development of the platform economy. will be delayed. It’s that it may be implemented in slightly different ways across the EU.
Pillar 1: Digital reporting requirements & e-invoicingElectronic invoicing - widely referred to as e-invoicing - is the exchange of a digital document between a supplier and a buyer. E-invoices are issued, transmitted and received in a structured data format that enabled automatic and electronic processing. They contain data in a machine-readable format so that an AP system can read an invoice without manual data entry, leading to faster and more efficient invoicing.
Planned for 2030, this pillar is where most of the technical work is happening.
There has been solid progress. EN 16931 has now been approved for ViDA, and the Peppol pilot with tax authorities is ongoing. A second draft of the Explanatory Notes is in circulation, and there is even early discussion about transition periods extending out to 2035.
But once you get into the detail, agreement starts to thin out.
Basic concepts are still being debated. For example, there is no consistent view yet on when an invoice is considered issued, transmitted, or received. That might seem like a small point, but it affects reporting deadlines, system design, and compliance checks.
The same applies to the definition of a “transaction” for DRR purposes. Without a clear definition, businesses will have to make assumptions when building reporting logic.
Another point to watch is service provider accreditation. The current direction suggests EU-level criteria may not be mandatory, which would allow Member States to take their own approach.
And then there is the question of transition. Countries like Italy, France and Spain already have established reporting systems. Moving from those into a harmonised EU model is not straightforward, and there is still no agreed path for how that happens.
So while there is a common standard emerging, how it is applied could still vary quite a bit.
Pillar 2: The platform economyThe platform economy is built upon the growing tendency for businesses - especially retailers - to use digital platforms and marketplaces to sell goods or services. Such platforms are underpinned by computer systems and allow companies to more easily reach and connect with prospective consumers with the intention of completing sales.
The platform economy pillar is moving forward, but discussions are still fairly high level compared to the other areas.
The main idea that platforms becoming responsible for VAT in certain transactions is not changing. What is still being worked through is how that applies across different business models and sectors.
There are ongoing questions around scope, how to identify the relevant supplier, and how to deal with more complex platform chains. Timing and edge cases are also still being considered.
At this stage, it feels like the direction is broadly agreed, but the practical detail will take more time to settle.
Pillar 3: Single VAT registration and one-stop shop
The Single VAT Registration (SVR) pillar is further along than the others, especially with the first set of changes due in January 2027.
Work is ongoing to expand the One Stop Shop and clarify how the system will operate in practice. Compared to the other pillars, there is more structure here already.
Even so, some important points are still being worked through.
One example is the €10,000 threshold and whether it should include stock held in multiple Member States. That has direct implications for businesses managing inventory across borders.
There is also the confirmed position that SME schemes and IOSS cannot be used together. That simplifies the framework in one way, but reduces flexibility for smaller businesses.
The 2027 changes are mostly technical, with more complex elements planned for 2028. That gives some breathing room, but it also means some uncertainty will continue for a while.
Where this leaves ViDA
Looking across all three pillars, the overall direction is still consistent.
There is progress, the framework is becoming more detailed and implementation planning is clearly underway.
At the same time, the closer the discussions get to real-world application, the more differences start to appear:
- Key definitions are not fully settled
- Similar scenarios are being interpreted in different ways
- Member States are keeping some flexibility in how they apply the rules
That combination creates a risk that ViDA ends up looking harmonised at a high level, but less consistent in practice.
The next phase will be less about setting direction and more about tightening the detail, especially where those details affect how systems are built and how businesses actually comply.
