ViDA package approved by European Council

The proposal for regulatory modifications of VAT, known as the VAT-in-the-Digital-Age package (“ViDA”), launched by the European Commission (the “Commission”) in December, 2022, has been the subject of intense debate within the EU and was finally approved by the European Council (“EC”) on March 11 (press release: https://taxation-customs.ec.europa.eu/news/adoption-vat-digital-age-package-2025-03-11_en).

As we have reported in previous communications, this regulatory package —which amends (i) VAT Directive (2006/112/EC), (ii) Council Regulation on administrative cooperation and combating fraud in the field of value added tax (EU 904/2010) (“Council Regulation on administrative cooperation”), and (iii) Council implementing regulation (282/2011) laying down implementing measures for Directive 2006/112/EC on the common system of value added tax— is aimed at updating and adapting taxes to the digital economy in three specific areas:

• einvoicing and digital reporting;
• platform economy; and
• single VAT registration

In our previous Post | ECOFIN gives go ahead to VAT-in-the-Digital-Age package, we explain these areas in detail and focus on their phased entry into force.

The next step will be the regulation’s publication in the Official Journal of the European Union, after which many of the agreed measures will be implemented immediately. Among these latest measures is the possibility for Member States to introduce mandatory einvoicing (articles 217, 218 and 232 of VAT Directive). Under the approved regulation, Member States wishing to implement mandatory einvoicing will be able to do so without prior directive derogation approval from the Commission, since this would already be possible with the approved amendment. Spain is in this situation with a bill under way to impose mandatory einvoicing in B2B transactions between business owners and professionals.

Among the other approved measures, certain import one-stop-shop (“IOSS”) improvements will also be introduced immediately. Particularly, powers will be granted to the Commission to ensure the correct use and verification process of IOSS identification numbers, to prevent fraud that has been detected (article 143.1ª VAT Directive). Various measures are included in the Council Regulation on administrative cooperation, aimed at increasing the powers of customs authorities when accessing information on registered IOSS operators and extending the information to be provided under this scheme.