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ViDA is a legislative package for modernising value added taxation
Major changes will be introduced into the value added taxation of businesses operating within the EU, especially as regards invoicing and VAT reporting. The changes will be carried out gradually, the most important ones taking place in 2028–2035.
The changes are based on ViDA (VAT in the Digital Age), a set of EU regulations aiming to modernise the VAT system to comply with digital business models, such as e-commerce and platform economy.
ViDA consists of three sub-areas
1. EU-wide VAT registration
The change will expand the use of VAT special schemes (One-Stop Shop, OSS). In future, the special schemes will also cover the following sales of goods, for example:
- goods sold locally when the seller is not established in the Member State of consumption
- supply of goods with installation or assembly
- supply of electricity, heat and other energy commodities.
The current special schemes cover all the services sold to consumers in the EU and distance sales of goods to consumers in the EU.
In addition, a new special scheme regarding the transfer of own goods will be introduced. The provisions on call-off stocks will be terminated.
The VAT reverse charge will be widely applied in trade between businesses within the EU in situations where a foreign seller is not established in the country of supply of the goods or services. In Finland, the VAT reverse charge is used even at present.
The change will advance the objective of the EU to enable VAT registration for the whole of EU. On account of the upcoming changes, companies’ need to register for VAT in another EU country will notably decrease. The changes will enter into force on 1 July 2028. In consumer sales of electricity and other energy commodities, however, they will be applied as of 1 January 2027.
2. VAT on platform economy
The change concerns digital platforms offering short-term accommodation services (up to 30 days) or passenger transport services. In future, the platform may be liable to pay VAT if the service provider is not liable for VAT.
The objective is to make service sales carried out through platforms equal to traditional business opearations from the point of view of value added taxation. The change becomes voluntarily effective on 1 July 2028 and mandatorily effective on 1 January 2030.
3. Digital VAT reporting and electronic invoicing in EU sales
In intra-Community supply of goods and services, transaction-specific VAT reporting based on electronic invoicing will be adopted. In future, companies must send and receive electronic invoices according to the European standard in cross-border transactions between businesses. The seller must prepare an invoice and report the invoice details to the tax authority within 10 days of the sales transaction or the receipt of an advance payment. In principle, the buyer must report the invoice details to the tax authority within 5 days of the receipt of the invoice. However, Member States can opt not to include purchase invoices in the mandatory reporting.
The objective of the change is to improve the efficiency of tax control and to reduce fraud in the EU. Electronic invoicing and transaction-specific reporting of VAT will become mandatory in cross-border EU sales as of 1 July 2030. The use of VAT Recapitulative Statements will end.
Member States can introduce transaction-specific reporting regarding domestic transactions if they so want. Even in this case, the reporting must be based on electronic invoices. National reporting systems must be in line with the reporting system for EU sales by year 2035.
What will happen next?
The Council Implementing Regulation (EU) and regulation on administrative cooperation are binding to all Member States and they must be applied as they are. The requirements laid down in the EU directive will be incorporated into national legislation, and the related Government proposal will be prepared by the Ministry of Finance. The European Commission will continue preparing technical and clarifying instructions.
Statutes included in the ViDA package
Council regulation (EU) 2025/517
Council Implementing Regulation (EU) 2025/518