The ViDA initiative, or VAT in the Digital Age, aims to modernize and harmonize the current VAT system in the European Union (EU) in order to curb tax fraud. The initiative is a series of measures that include introducing mandatory electronic invoicing and a transaction-based reporting system for intra-community B2B sales.
Starting January 1st, 2028, these new regulations will be mandatory throughout the EU. This move towards electronic invoicing is seen as a positive step towards modernizing the VAT system and making it more efficient and transparent. Only certain invoice data will be transmitted to the tax authorities, which will help reduce the risk of tax fraud and errors associated with manual processing.
ViDA initiative as a precursor to EU-wide e-invoicing
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Author: Kristina Dosen
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Fiscal subject related
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Content accuracy validation date:
11.05.2023
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To achieve this, the prerequisite is the use of electronic invoices, which will be mandatory for companies to send and receive invoices. This will enable the automated processing of invoices, reduce the workload on businesses, and help prevent VAT fraud.
Furthermore, at a later point in time, a uniform electronic system for all national and cross-border B2B invoices is also planned, which will enable businesses to process invoices across the EU in a standardized manner. This will further reduce the administrative burden on businesses and make it easier to comply with VAT regulations across different member states.
The ViDA initiative has been welcomed by many businesses, as it is expected to reduce the costs associated with traditional paper invoicing and manual processing. However, companies are advised to prepare for the expected changes by adjusting their accounting processes accordingly. This includes upgrading their accounting software to enable e-invoicing and ensuring that all relevant stakeholders are informed about the changes.
Overall, the ViDA initiative is seen as a positive step towards modernizing the VAT system in the EU and reducing tax fraud. By introducing a uniform electronic system for all national and cross-border B2B invoices, it is expected to reduce the administrative burden on businesses and make it easier to comply with VAT regulations across different member states.