EU ViDA Pillar 1: Your Comprehensive Guide to Digital Reporting & E-Invoicing Compliance

The EU ViDA (VAT in the Digital Age) reforms are pivotal for businesses engaged in intra-community trade. Here’s a comprehensive look at Pillar 1, targeting a July 2030 launch:

Key Developments for EU Digital Reporting

• EN16931 Standard Update: The standard will evolve from B2G to B2C, with a draft anticipated in June 2025, preparing it for B2B scenarios as well.
• Central VIES Implementation: An IT project for the central VAT Information Exchange System (VIES) will begin, aiming for digital transaction reporting from July 2030.
• Workshops and Groups: The Fiscalis group is actively refining implementation details, with the next workshop in Greece focusing on electronic message formats.

Digital Reporting Requirements (DRR)

• Scope: Reporting will encompass intra-community supplies, acquisitions, B2B services, reverse charge, energy supplies, and triangulation.
• Flexibility for Member States: While each can tailor their protocols, a 10-day reporting deadline has been set.
• Central VIES Database: Managed by the EC, enhancing transparency and offering insights into reported transactions to prevent VAT fraud.

Mandatory E-Invoicing

• Structured E-Invoices: Mandatory for DRR transactions under Directive 2014/55/EU, with flexibility for other invoice types domestically.
• New Standards: The EN16931 will define e-invoice structures, with a draft due in July 2025.
• Deadlines: E-invoices must be issued within 10 days of the chargeable event, with specific rules for self-billing and payments on account.
• Accreditation Schemes: Validation of e-invoice structures by tax authorities will become standard.

Timeline

• July 2030: Introduction of DRR and e-invoicing mandates for intra-community transactions.
• July 2032: Legacy VIES system phased out.
• January 2035: Domestic transaction reporting aligns with ViDA standards.

Impact on Businesses

• SMEs: Smaller enterprises might find the transition challenging due to resource constraints but could benefit from reduced fraud risk.
• Multinationals: Large corporations will need to update their systems to comply across multiple countries, potentially streamlining processes.

5 Steps to Prepare for ViDA Reforms

1. Stay Informed: Regularly check updates from the EU and your local tax authority.
2. System Audit: Assess your current billing and reporting systems for compliance readiness.
3. Training: Educate your finance and IT teams on the new standards and requirements.
4. Software Updates: Work with software providers to ensure your systems can handle e-invoicing and DRR.
5. Test Early: Participate in pilots like the Peppol ViDA to test compliance and readiness.

Glossary of Terms:

• VIES: VAT Information Exchange System, facilitating VAT registration checks across EU countries.
• DRR: Digital Reporting Requirements, mandating near-real-time reporting of transactions.
• EN16931: The European standard for electronic invoicing.