VAT in Digital Age (ViDA)

The ViDA (VAT in the Digital Age) directive is a proposed piece of legislation introduced by the European Commission on December 8, 2022, aimed at modernizing the value-added tax (VAT) system within the European Union (EU). The directive seeks to address the challenges posed by the digital economy and improve the efficiency of the VAT system in combatting fraud.

The ViDA directive includes provisions for the standardization of electronic invoicing, which is expected to become the norm for intra-EU B2B transactions starting January 1, 2028. This standardization will ensure that invoices comply with the European standard EN 16931-1:2017 and include mandatory payment information that will be transmitted to tax authorities and made accessible to all Member States.

The directive also includes provisions for the mandatory use of the reverse charge mechanism in B2B transactions, the expansion of the deemed reseller mechanism for e-commerce platforms to all goods sales and stock transfers, and the application of the distance selling regime to second-hand goods, works of art, antiques, and collectors' items in B2C transactions. Additionally, the ViDA directive includes changes to the one-stop-shop (OSS) regimes and the regime applicable to furnished rentals.

Overall, the ViDA directive aims to adapt the VAT system to the challenges posed by the digital economy, improve the efficiency of the VAT system in combatting fraud, and ensure a standardized approach to invoicing within the EU.

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