ViDA stands for for VAT in the Digital Age – a major initiative from the European Commission designed to modernise the existing VAT system by 2028.

Why now? Because the way businesses operate has changed – and VAT needs to keep up.

ViDA is built around 3 key goals:

  • Closing the VAT Gap
  • Simplifying compliance
  • Improving data accuracy and forecasting

For any businesses operating in the EU, ViDA represents a shift in how VAT is reported, managed and enforced. It aims to streamline systems, automate returns and reduce fraud, all while creating a more fair and future-ready tax framework.

It also brings VAT rules in line with the digital economy – covering everything from e-commerce platforms to digital services that have long outpaced traditional regulations.

ViDA isn’t just a policy update – it’s a digital step forward for businesses across Europe.

What is the VAT Gap?

The VAT Gap is the difference between what EU countries should collect in VAT – versus what they actually receive.

It has two main components:

  • The Compliance Gap: VAT lost through fraud, evasion or reporting errors
  • The Policy Gap: VAT not collected due to exemptions, reduced rates or other policy choices

Why does it matter? Because closing the VAT Gap means stronger tax systems, fairer markets and better public services.

By addressing these gaps, EU countries can improve tax administration, boost revenue collection and build a more consistent and  efficient VAT system for everyone.

What does ViDA mean for your business?

If you trade in Europe, ViDA will change how you manage VAT.

The European Commission has outlined three key pillars that every business should prepare for:

  • Digital Reporting Requirements (DDR) – Real-time e-invoicing and data sharing with tax authorities

  • Updated VAT rules for the platform economy – Platforms may become responsible for collecting and reporting VAT

  • Single VAT Registration – Register once and manage VAT for all EU countries through one central system

Digital Reporting Requirements (DDR)

DDR is one of ViDA’s key changes and it’s set to transform how VAT is reported across the EU.

Under DDR, businesses will need to submit transactional data electronically — either in real time or at regular intervals — for intra-EU supplies. It’s built on e-invoicing and designed to ensure interoperability across borders.

What does that mean in practice?

  • Less manual work

  • Faster, more accurate reporting

  • Stronger compliance and fraud prevention

By automating data exchange between businesses and tax authorities, DDR helps build a smarter, more transparent VAT ecosystem – one that works better for everyone involved.

Platform Economy

The platform economy includes digital marketplaces, sharing platforms and online service providers that connect buyers and sellers. Under ViDA, the EU plans to extend the ‘deemed supplier’ rules — meaning that in certain cases, the platform (not the individual seller) will be responsible for collecting and reporting VAT.

For example:
If a platform offers short-term accommodation, it will handle the VAT, not the host.

This approach:

  • Simplifies compliance

  • Improves data accuracy

  • Ensures VAT is correctly collected and reported

By working directly with platform operators, ViDA brings clarity, transparency and fairness to digital transactions — creating a tax system that’s fit for the way business works today.

Single VAT Registration

Single VAT Registration is ViDA’s answer to one of the biggest pain points in cross-border trade: managing VAT in multiple countries.

Instead of registering separately in each EU Member State, businesses will be able to register once — in one participating country — and manage VAT compliance across the entire EU from a centralised platform.

The benefits are clear:

  • Less admin

  • Lower compliance costs

  • Smoother cross-border trade

While ViDA is still being discussed at EU level, and final timelines and details may shift,  businesses should start preparing now. System updates, process changes, and some up-front investment may be needed to stay compliant.

In the long run, though, ViDA offers a simpler, smarter, and more transparent VAT system — one that’s built for how businesses operate today.

How can Comply help?

Comply is built for the future of VAT and that includes everything ViDA demands.

Our intelligent VAT compliance solution takes the complexity out of filing by automating every step, from data upload to return submission. It integrates with your existing systems, applies country-specific VAT rules, flags discrepancies and prepares accurate returns for fast approval.

With Comply, you can:

  • Manage filing obligations across multiple jurisdictions

  • Track progress in real time

  • Calculate and verify returns automatically

  • Submit filings directly to the relevant tax authorities

  • View full audit trails for complete transparency

And through our global payment solution, Pay, you can handle tax payments in local currencies, consolidate providers and receive real-time confirmation from tax offices — all in one place.

Comply gives you the control, clarity, and confidence you need to stay ahead of ViDA. Stay compliant, no matter where you operate.