New ViDA delay: e-invoicing pushed back to 2030

Political sign-off for the new VAT in the Digital Age (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.) reforms will not take place this year¹https://www.europarl.europa.eu/meetdocs/2014_2019/plmrep/COMMITTEES/ECON/OJ/2023/10-23/1288249EN.pdf, meaning a delay to at least one of the three pillars that form the proposal.

With the European Commission yet to find a resolution to negotiations over Pillar 1 of the scheme, which comprises Digital Reporting Requirements (DRR) and 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., efforts to finalise the terms are set to be pushed back to early 2024.

As a result, the implementation date for DRR and e-invoicing across the EU will move from its current schedule of 2028 to 2030²https://www.europarl.europa.eu/doceo/document/ECON-AM-749001_EN.pdf.

At this stage, the other two pillars – Single VAT Registration and Platform Economy – could proceed towards a political agreement this year as planned and their existing implementation dates will be unchanged. However, this is by no means certain and further delays to Pillars 2 and 3 could be revealed soon.

What’s behind the delay?

The EU Parliament’s Committee on Economic and Monetary Affairs voted for a one-year delay to all three ViDA pillars on 23^rd October³https://www.europarl.europa.eu/cmsdata/277009/RCVs_points%2012-20%20inc.pdf, although this is not yet binding.

That brings into question the likelihood of Pillars 2 and 3 proceeding to schedule, with businesses and tax authorities known to have concerns around their ability to be ready for ViDA by its current due date of 2025.

Following a simultaneous vote in the European Parliament to delay a ViDA cooperation agreement by 12 months⁴https://www.europarl.europa.eu/meetdocs/2014_2019/plmrep/COMMITTEES/ECON/AM/2023/10-23/1278713EN.pdf, there could also be a knock-on effect that would trigger a further delay to the implementation of the three core pillars.

What are the ViDA plans?

ViDA was proposed by the European Commission in December 2022 and is comprised of three pillars.

Pillar 1 – DRR and e-invoicing – due 2028 (now delayed until at least 2030)

DRR will be introduced for all B2B transactions in the EU. This will mandate suppliers and customers to submit data via digital channels to their local tax authority within 48 hours of each invoice being issued. The European Commission will no longer have to approve e-invoicing regulations and some pre-clearance validations of data will be introduced.

Pillar 2 – Platform Economy – due 2025

The rise of 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. has placed additional strain on the existing VAT system and increased inequality between digital platforms and more traditional sellers. ViDA is designed to improve fairness by introducing a deemed supplier model in which platforms will be required to account for VAT on the underlying supply where no VAT is charged by the supplier.

Pillar 3 – Single VAT Registration – due 2025

This will allow businesses to register for VAT only once across all EU countries; minimising the time, cost and administrative burden of having to file in each country independently.

We’ll be sharing more news and insight about exactly what this means for businesses shortly. Visit our website in the coming days for a full review of the ramifications, repercussions and results of this ViDA delay.