ViDA (VAT in the Digital Age): what does the EU VAT reform change for invoicing?
ViDA is the EU's most extensive VAT reform in decades. We will cover what it means for invoicing and reporting.
"ViDA (VAT in the Digital Age) is the EU's largest VAT reform in decades. It will change the way businesses report VAT and send invoices. In this article, we will go through what ViDA means for a Finnish small business and how to prepare for it."
"What is ViDA?"
"ViDA (VAT in the Digital Age) is the EU Commission's proposal for modernizing the VAT system. It consists of three pillars:"
- "Digital Reporting Requirements (DRR): real-time or near real-time VAT reports to authorities"
- "Platform VAT obligations: digital platforms (Airbnb, Uber-types) collect VAT"
- "Single VAT Registration model: one registration is sufficient throughout the EU"
The most significant change for Finnish small businesses is digital reporting.
Digital reporting – what changes?
With ViDA, companies will have to report VAT data to the authorities in near real-time. The current model, where VAT declarations are made monthly or quarterly, will become more automated.
In practice, this means:
- Invoice data is automatically reported to the authorities in a structured format (e-invoice)
- A separate VAT declaration may not be necessary if the data comes directly from invoices
- Reporting in intra-EU trade will change particularly – current recapitulative statements may be abolished
Read more about the legal requirements of e-invoicing in our e-invoicing article.
Structured data is key
ViDA requires invoice data to be in a structured format – not as PDF files. In practice, this means e-invoicing.
Companies that already use e-invoicing (e.g., through Eemel Invoicing) are in a good position. Those that send invoices as PDFs or on paper will have to change their processes.
Preparation checklist
- Start using e-invoicing if you haven't already
- Ensure that your invoicing software supports structured data (EN 16931)
- Follow the Finnish Tax Administration's announcements on the national implementation of ViDA
- Check the VAT treatment of your EU trade – recapitulative statements may change
- Be prepared for invoice data to be automatically reported to the tax authorities
Practical example: online store in EU trade
A Finnish online store sells its products in Finland, Sweden, and Germany. Currently, the company makes a monthly VAT declaration to Finland and a recapitulative statement for EU sales.
With ViDA:
- Invoice data is automatically reported in real-time – a separate monthly declaration may become lighter
- One VAT registration may suffice across the entire EU (Single VAT Registration)
- Invoicing software must support structured invoicing
Try it in practice
Eemel Invoicing supports e-invoicing and structured data. Prepare for ViDA's requirements now.
Try for 14 daysFrequently asked questions
When will ViDA come into force?
Different parts of ViDA will come into force in phases. The requirements for digital reporting are expected to come into effect between 2028 and 2030, but the timeline may still be refined.
Does ViDA apply to small businesses?
Yes, at least concerning e-invoicing and structured data. Small businesses may receive simplifications, but the basic requirement applies to everyone.
Do I need to change my invoicing software?
If your current software supports e-invoicing and structured data, probably not. Eemel Invoicing is already ready for ViDA's requirements.
How does ViDA differ from the current VAT declaration?
Currently, VAT is declared cumulatively monthly or quarterly. With ViDA, reporting will be invoice-specific and in near real-time.
What does Single VAT Registration mean?
It means that one VAT registration is sufficient across the entire EU. A company does not need to register in every country where it sells.
This article is general in nature and does not constitute legal advice.