The European Union is fundamentally changing how businesses fulfil their VAT obligations with the „VAT in the Digital Age" (ViDA) initiative. What at first glance appears to be a technical regulation is, in practice, one of the most far-reaching interventions in the financial and accounting processes of European companies in years.

This post explains what ViDA means in concrete terms, what digital reporting requirements companies can expect, and why the need for action is greater than many assume today.

What is VAT in the Digital Age (ViDA)?

ViDA (VAT in the Digital Age) is an initiative by the European Commission to modernise the European VAT system. It was presented on 8 December 2022 and formally adopted on 11 March 2025. The aim is to combat tax fraud, close the VAT gap, and simplify reporting obligations for businesses (particularly in the cross-border B2B sector).

ViDA comprises three core areas: the introduction of mandatory electronic invoicing for cross-border transactions, new Digital Reporting Requirements, and adjustments in the platform economy. The Digital Reporting Requirements are particularly important for companies with international supply chains.

What are Digital Reporting Requirements?

Digital Reporting Requirements (DRR) describe the obligation to electronically submit transaction data to the tax authorities in real time. Instead of reporting VAT periodically in bulk submissions, tax information is intended to come directly from the  E-bill be automatically forwarded.

The background is concrete: the VAT gap (i.e. the difference between expected and actually collected tax revenue) is a massive problem across Europe. According to the annual Billentis Market Report, the tax gap in many countries is between 20 and 30 percent of public tax revenue. For Germany alone, it is estimated to be around 31 billion euros annually.

Experiences from countries that have already introduced digital reporting systems clearly show the impact: Italy has recorded an annual increase in tax revenue of around €6 billion since the introduction of its e-invoicing obligation. Greece has reduced its VAT gap from 29 percent in 2017 to around 9 percent in 2024.

These figures show why the EU is setting a clear course with ViDA and the Digital Reporting Requirements: the digitalisation of tax processes is no longer an option, but a decided political priority.

ViDA Germany: What companies can expect specifically

For companies operating in Germany, ViDA has a direct consequence: by 1 July 2030 at the latest, reporting data for cross-border intra-Community B2B transactions must be submitted digitally and close to the transaction. The previous summary report will thus be abolished.

In practice, this means that every cross-border B2B invoice must be structured in such a way that the relevant VAT data can be automatically extracted and forwarded from it without manual intervention. This requires a structured, machine-readable e-invoice and a system that can technically implement this forwarding.

In addition, there is the context of the German E-invoicing obligationFrom January 2025, all companies in the B2B sector will be obliged to, Receive e-invoices to be able to. From 2027 or 2028, the Shipping obligation. Anyone building this infrastructure today without considering ViDA risks a complete re-implementation in a few years.

How other EU countries are already implementing ViDA

Germany is not the first country to grapple with these requirements. A look at other EU member states reveals how diverse and far-reaching the national implementations are.

Belgium introduced a full Peppol-based e-invoicing mandate on 1 January 2026. Tax reporting (e-Reporting) is planned for 2028 and will also be handled via the Peppol network.

France created a model where accredited invoicing platforms report the status of invoices and tax data via a national interface. The model is based on the so-called 5-corner principle, where the tax authority is integrated as the fifth node in the e-invoicing exchange.

Italy As the first EU country, it pioneered with its Sistema di Intercambio (SdI), which has been mandatory for all B2B, B2G and B2C invoices since 2019. Italy's experience shows both the advantages and challenges: the FatturaPA XML standard used is not based on the EU norm EN 16931, which complicates cross-border compatibility and forces companies to manage different formats in parallel.

It is predicted that by 2030, all EU member states will have introduced, or at least initiated, national digital reporting platforms. Many countries are orienting themselves towards decentralised models based on the Peppol network. This speaks to compatibility and interoperability, but also places clear demands on the infrastructure used.

What this means for your own IT and accounting infrastructure

The central question for businesses is: Is their current e-invoicing solution already designed to support ViDA-compliant reporting?

Three technical prerequisites are crucial here:

1. Firstly, the solution must be based on the European standard EN 16931. This standard defines the semantic data model for e-invoices and forms the basis for interoperability between national systems (also with regard to ViDA). Solutions that use proprietary formats will reach their limits in the medium term.
2. Secondly, the infrastructure must be capable of automatically extracting reporting data from e-invoices and forwarding it to the responsible authority concurrently with invoice dispatch. This eliminates the need for an additional manual step. This presupposes seamless integration between ERP, financial accounting, and the invoice platform.
3. Thirdly, the solution should with the Peppol-Be network-compatible. Peppol is already a standard in many EU countries today and is also being discussed as a preferred transport route in the context of ViDA. Anyone who relies on Peppol today is much better positioned for cross-border requirements.

Conclusion: ViDA will affect your business sooner than you think

ViDA is changing how businesses communicate with tax authorities across Europe, and it’s binding. While the deadlines may seem a few years away, what is built today is crucial. Businesses that set up e-invoicing in a way that already meets the technical requirements of ViDA and Digital Reporting Requirements will not only save effort and costs later but also lay the groundwork for more efficient, automated financial processes.

Recommendation for companies: When selecting or further developing your e-invoicing solution, specifically check if it is EN-16931 compliant, supports Peppol, and is technically prepared for upcoming reporting obligations. The investment in the right infrastructure pays off: today through process efficiency, tomorrow through compliance security.

About ivi

ivi is the E-Invoicing Platform sgh Service GmbH. It integrates e-invoices into existing ERP, accounting, and DMS systems and is designed for the upcoming requirements of ViDA and the German reporting system. The year 2028 is coming sooner than you think, and we'll show you how to lay the right foundation now. Book an appointment now.

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Sources: Billentis Market Report 2026 „Riding the Tornado"; VeR Strategy Paper „Efficient Implementation of the Reporting System", May 2026; EU Commission ViDA Initiative 2022/2025.