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Five years after the EU’s VAT e-commerce reforms came into effect, the numbers are starting to show just how significant the changes have been. Since July 2021, more than €125 billion in VAT revenue has been collected through the EU’s One Stop Shop (OSSOSS (One-Stop Shop): An EU VAT system allowing businesses to report and pay VAT for cross-border sales in a single EU member state.) and Import One Stop Shop (IOSS) schemes, as businesses increasingly use the simplified processes for cross-border e-commerce.
And the momentum is continuing. In 2025 alone, more than €38 billion in VAT was collected through the schemes, a 17% increase on the previous year – while more than 193,000 businesses were registered to use the schemes by the end of 2025.
The figures are a useful indication of how much the EU’s approach to VAT has changed. Before the 2021 reforms, businesses selling across multiple Member States could face a growing number of local VAT registrations and compliance obligations. OSS and IOSS were introduced to simplify that process, allowing businesses to declare and pay VAT on eligible cross-border sales through a single registration and electronic return, rather than managing separate VAT registrations for every country in which they sell.
Five years on, the European Commission is pointing to the €125 billion figure as evidence that these simplified arrangements are being widely adopted and it also provides an interesting indication of where EU VAT compliance is heading next.
That brings us to VAT in the Digital Age, or 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..
Adopted in 2025, ViDA represents the next major stage in the EU’s VAT modernisation programme. While the reforms cover several areas, one of the most relevant developments for businesses is the move towards Single VAT Registration (SVR). Building on the existing OSS model, ViDA will expand the transactions that can be dealt with through OSS and introduce a new scheme for transfers of a business’s own goods between Member States.
The longer-term direction is clear: fewer separate VAT registrations where possible, more centralised reporting and a more consistent approach to VAT compliance across the EU.
For businesses, that could ultimately mean a simpler VAT registration footprint. Organisations that currently hold multiple VAT registrations because of their cross-border activities may have opportunities to consolidate some of those obligations as the new rules come into effect. The Commission describes this as moving towards a single VAT registration in the EU, building on what has already been demonstrated through OSS.
But simplification does not necessarily mean less compliance.
In fact, the wider ViDA reforms are likely to make the quality of transactional data even more important. Alongside the Single VAT Registration changes, ViDA will introduce Digital Reporting Requirements for cross-border B2B transactions from 1 July 2030, supported by 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.. The intention is to give tax authorities more detailed and timely information about transactions and strengthen their ability to detect and tackle VAT fraud.
This means the future of VAT compliance is not simply about having fewer registrations or submitting fewer returns. It is increasingly about having the right data, systems and controls in place to support compliance at transaction level.
For businesses, this is where the €125 billion milestone becomes particularly interesting. The success of OSS shows that a more centralised approach to VAT reporting can work at scale. ViDA now builds on that foundation, combining greater simplification in some areas with significantly greater digitalisation and visibility in others.
As the reforms continue to roll out, businesses should therefore be looking beyond individual deadlines and considering the bigger picture. Are VAT registrations still structured in the most efficient way? Is VAT being determined consistently across different systems and markets? Is transactional data accurate and accessible? And can existing finance and tax processes cope with a move towards more digital, frequent and detailed reporting?
The good news is that businesses have time to prepare. The different elements of ViDA are being introduced in stages, with the Single VAT Registration measures beginning from July 2028 and the Digital Reporting Requirements for cross-border B2B transactions following from July 2030. The full ViDA programme will continue to roll out through to 2035.
For businesses operating across Europe, now is a good time to understand what that could mean for their own VAT footprint, data and processes.
