The European Council Reaches Consensus on the ViDA Proposal
During the ECOFIN meeting on November 5, 2024, the European Council finalized its position on the latest iteration of the ViDA proposal. This revised document addresses the three key pillars of the proposal while resolving issues that previously hindered its approval.
Agreement Achieved After Intense Deliberation
Following extensive discussions and numerous revisions, the newest version of the ViDA proposal has been approved. While this iteration does not introduce major changes compared to earlier drafts, it incorporates some adjustments to timelines. These updates aim to clarify the proposal’s implications and its potential future impact.
Focus on Three Pillars
The proposal continues to center around its core objectives: Single VAT Registration, the Platform Economy, and Digital Reporting Requirements (DRR). Notable adjustments include deferring the implementation of One-Stop Shop (OSS) and reverse charge mechanism requirements to 2028. Additionally, platform economy provisions, particularly those targeting platforms offering hospitality and transport services, have been delayed until 2030.
Key Changes in Electronic Invoicing and Reporting
Significant updates to electronic invoicing and digital reporting requirements include:
- Eliminating the need for Member States to request a derogation for implementing mandatory electronic invoicing;
- Introducing Digital Reporting Requirements (DRR) for both domestic and cross-border transactions;
- Revising the definition of an electronic invoice;
- Adjusting timelines for invoice issuance and reporting obligations;
- Clarifying the future of existing Continuous Transaction Controls (CTC) mandates.
The removal of the derogation requirement for mandatory e-invoicing is expected to take effect immediately after the proposal's approval.
Implementation Timelines
By 2030, cross-border transactions will be subject to mandatory DRRs, while Member States will have the discretion to apply DRRs to domestic transactions. Countries with CTC systems implemented before January 1, 2024, must align their models with the proposal’s requirements by 2035.
Next Steps
Representatives of several Member States emphasized the importance and scope of the agreement as the ECOFIN meeting concluded. With the European Council’s endorsement secured, the proposal now advances to the European Parliament for further deliberation.
There’s more you should know about global e-invoicing changes – learn more about the new and upcoming regulations.
