EU VAT update - The ViDA Revolution & what businesses must do now to prepare

The EU’s VAT in the Digital Age (ViDA) reform is not simply another VAT update. It represents a structural transformation of how invoices are issued, processed, reported and audited across the European Union.

By 2030, only structured electronic invoice formats (such as XML, EDI and hybrid formats like Factur-X) will be legally recognised for VAT purposes. Traditional PDFs — even those sent by email — will no longer qualify as compliant electronic invoices.

For businesses trading in the EU, this means immediate strategic planning is essential.

ViDA and the End of Traditional Invoice Processing

ViDA introduces mandatory digital reporting and structured e-invoicing across the EU. The reform removes long-standing flexibility in how businesses manage invoices and VAT reporting.

Key Changes Businesses Must Understand

1️⃣ Structured E-Invoicing Becomes Mandatory

Only structured, machine-readable formats will be valid. PDF invoices will not qualify.

Businesses must ensure:

• ERP systems can generate structured invoice data

• Accounts payable systems can receive and process structured files

• Digital archiving meets EU compliance standards

2️⃣ Customer Consent Is No Longer Required

Suppliers will be able to issue structured e-invoices without needing recipient agreement. Customers must legally accept them.

This accelerates digital adoption across all sectors and removes the option to rely on paper or PDF workflows.

3️⃣ VAT Returns Will Be Pre-Filled by Tax Authorities

Invoice data will be transmitted to tax authorities in near real-time. VAT returns will increasingly be pre-populated using that data.

This creates a serious challenge for companies using:

• Invoice “parking” systems

• Delayed approval workflows

• Manual accounts payable processes

If tax authorities see an invoice before it is posted in your accounting system, discrepancies will arise.

4️⃣ Internal Processes Must Match Real-Time Reporting

There is a growing speed gap between:

• Digital tax reporting systems (real-time)

• Internal finance approvals (often days or weeks)

Businesses must redesign approval workflows to align with digital reporting timelines.

What This Means for Your Organisation

ViDA is not just a compliance update. It is:

• A finance transformation project

• A systems integration project

• A governance redesign exercise

• A VAT risk management overhaul

Companies trading cross-border within the EU face particular exposure, especially where multiple VAT registrations are involved.

Early preparation will reduce disruption and protect compliance integrity.

How 4 Eyes Ltd Supports Clients

At 4 Eyes Ltd, we support UK and international businesses with:

• EU VAT impact assessments

• Digital reporting readiness reviews

• ERP and process risk diagnostics

• Cross-border VAT compliance alignment

The businesses that prepare early will gain operational clarity and reduce audit risk. Those that delay will face increasing exposure as member states implement real-time reporting regimes.

If you would like a tailored ViDA readiness assessment, please contact us.