{"id":717676,"date":"2023-06-07T06:56:31","date_gmt":"2023-06-07T11:56:31","guid":{"rendered":"https:\/\/www.spscommerce.com\/?p=717676"},"modified":"2025-07-11T05:21:03","modified_gmt":"2025-07-11T10:21:03","slug":"the-vida-proposal-in-the-european-vat-system-invoice-exchange-by-tax-authorities-in-the-future","status":"publish","type":"post","link":"https:\/\/www.spscommerce.com\/eur\/blog\/the-vida-proposal-in-the-european-vat-system-invoice-exchange-by-tax-authorities-in-the-future\/","title":{"rendered":"The ViDA Proposal in the European VAT System: Invoice Exchange by Tax Authorities in the Future"},"content":{"rendered":"

Updated in March 2025<\/em><\/p>\n

The main reason for this measure, as explained earlier, is first of all to fight VAT fraud. Throughout the world, e-invoicing is the tool to achieve this goal, and it is the only legal tool. Therefore, in addition to all the obvious benefits of e-invoicing, it is also an obligation for all European businesses.<\/p>\n

Exchange of Invoices through Tax Authorities<\/strong><\/h2>\n

The European Union plans to implement the ViDA VAT system<\/a> by 2030. After this deadline, invoices that do not comply with the new guidelines will not be accepted for payment. The main change brought about by this legislation is that the exchange of invoices<\/a> will take place through the tax authorities. The specific methods may vary from country to country, but the basic concept remains the same: every invoice with a VAT component will pass through the tax authorities. This enables them to monitor compliance with VAT obligations on an invoice-by-invoice basis.<\/p>\n

Impact on Processes and Systems<\/strong><\/h2>\n

In order to comply with future legislation related to the ViDA Directive, many companies will need to undergo a digital transformation. The implementation of the so-called “4 Corner Model” – the interaction between the supplier, the customer and the involved service provider(s) – is necessary to meet the requirements of the new directive.<\/p>\n

A major challenge is that the legislation will have a significant impact on the financial processes that ensure invoices are sent correctly, completely and on time, and received in the same way. The impact will be felt both on the organizational side, in terms of financial operations, and on the technical side, in terms of systems.<\/p>\n

Of course, the degree of impact will vary from company to company, especially depending on the level of international operations. For example, there are many companies that only sell within Belgium or the Netherlands, but source their products from all over the world. Conversely, there are companies that have extensive operations in several countries and receive expenses, for example, from their subsidiaries around the world. In all these cases, the impact of the new digital VAT system is significant.<\/p>\n

Although we are currently discussing an EU directive, the direction taken is not dissimilar to what we are seeing in other parts of the world, such as America and Asia, where similar developments are already taking place. However, it should be noted that, as in the EU, each country has its own approach and may adopt changes at a slightly different pace.<\/p>\n

Prepare in Time for Implementation<\/strong><\/h2>\n

While it would be expected that any business would be thoroughly prepared for this form of digitization, it is not advisable for business owners to assume this without further consideration. Many smaller businesses have no knowledge of the subject, let alone an idea of the implications.<\/p>\n

From January 1, 2027, there are expected small clarifications impacting those using the One-Stop-Shop schemes\u00a0 (OSS and IOSS).From July 1, 2028, the Single VAT Registration elements come into effect:<\/div>\n
    \n
  • Extension of the OSS schemes<\/li>\n
  • Mandatory reverse charge for non-identified suppliers<\/li>\n<\/ul>\n
    From July 1, 2030, the Digital Reporting Requirements measures coming into effect – main impact on businesses making cross-border B2B supplies.By July 1, 2035, the deadline for aligning domestic digital real-time transaction-based reporting obligations with the EU-system.<\/div>\n

    SPS Commerce\u00a0 warmly welcomes the fact that larger companies, as well as governments, are actively educating and assisting their suppliers and customers as much as possible. This is essential as it is not good for anyone if companies have to organise various aspects at the last minute.<\/p>\n

    It is therefore crucial for companies to start preparing now for the implementation of the proposed legislation. Just think of the necessary adjustments in your financial management, which cannot be done in a few months. In addition, no one can anticipate all the potential changes that may occur within a company between now and 2028, such as acquisitions, reorganizations, scaling up, or ERP migrations. These are examples of significant changes with profound implications.<\/p>\n

    Therefore, it is important to proactively prepare for this legislation now to avoid unwanted attention from the tax authorities and to ensure the continued payment of your bills in the future. That future is much closer than you may think, especially if you do business internationally!<\/p>\n","protected":false},"excerpt":{"rendered":"

    Experts compare the impact of the ViDA proposal with the introduction of the euro in 2002. Those who are not prepared in time for this milestone will effectively be out of the game. In the sense that their invoices will no longer be paid. What changes will this law bring about? How can companies prepare for this digital landslide in the VAT system?<\/p>\n","protected":false},"author":174,"featured_media":720314,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","sfsi_plus_gutenberg_text_before_share":"","sfsi_plus_gutenberg_show_text_before_share":"","sfsi_plus_gutenberg_icon_type":"","sfsi_plus_gutenberg_icon_alignemt":"","sfsi_plus_gutenburg_max_per_row":"","footnotes":""},"categories":[32139],"tags":[],"class_list":["post-717676","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-e-invoicing-2"],"acf":[],"yoast_head":"\nThe ViDA Proposal in the European VAT System: Invoice Exchange by Tax Authorities in the Future - SPS Commerce<\/title>\n<meta name=\"description\" content=\"What changes will ViDA-law bring about? 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