VAT in the Digital Age (ViDA) Reform: What Expat Businesses & Freelancers Need to Know

The ViDA reform was adopted to modernize the European VAT system, making it more fair, transparent, and better suited to the digital economy. It introduces three pillars:

1. E-invoicing / real-time reporting (digital notification of transactions)

2. Platform economy tax modernization (simplified cross-border services)

3. Enhanced One-Stop Shop (OSS / IOSS) for businesses selling within the EU

Before ViDA, businesses often had to register for VAT in each EU country where they sold or provided services, greatly complicating tax compliance. The reform aims to standardize rules, facilitate electronic invoicing, and limit fraud.

Member states have their own timelines for adopting aspects of the reform — some obligations enter immediately, others will be phased in gradually until 2035.

For expats running activities (online product sales, service provision, consulting, freelancing), these changes can alter how you invoice, declare, collect VAT, and manage cross-border formalities.

Here are the main changes you (entrepreneur, freelancer or micro-business) can anticipate:

Invoicing and e-invoicing: Member states may impose structured electronic invoicing (e-invoicing) or real-time reporting obligations for intra-community or local transactions, depending on national implementation. If you sell to other EU countries, you may need to adopt an approved invoicing format or send data flows to tax authorities in near real-time.

Digital platforms & third parties: If you sell through a platform (e.g. marketplace, application), the reform clarifies VAT collection responsibilities, especially for cross-border B2C sales. In some cases, the platform entity may collect or pay VAT on your behalf.

Modernized One-Stop Shop (OSS / IOSS): The OSS / IOSS (one-stop shop) system is enhanced. You can centralize your VAT obligations for EU sales through a single portal, rather than registering in each country.

Implementation timelines and phases: Not all rules take effect immediately. Some e-invoicing, reporting, or new format obligations will be staggered over time, until 2035 depending on member states. You must follow local legislation in each of your markets.

Communication to clients and existing invoicing: If you change your invoicing method (new format, mandatory mention, etc.), you'll need to inform your clients and adjust your invoice templates (adding numbers, VAT codes, legal mentions).

Increased complexity for micro-entrepreneurs / freelancers: For very small setups, some thresholds or exemptions may change depending on national adoption. If you're under a simplified regime, ensure you're not forced into disproportionate obligations.

Cash flow impact: If you must advance VAT (collection or payment via OSS), this can affect your cash flow. Plan for amounts to remit and currency differences if you operate in multiple currencies.

Here are concrete steps you can implement to anticipate ViDA's effects:

1. Learn about national transposition: Check how your country of residence has transposed ViDA rules (timeline, e-invoicing obligations, thresholds, OSS modalities). See our guide on opening a bank account in Europe to manage your finances.

2. Analyze your cross-border flows: If you sell or provide services to clients in other EU countries, identify volumes, countries involved, and VAT obligations in each.

3. Update your invoicing formats: Integrate new fields (VAT identification number, transaction nature codes, mandatory mentions) and prepare your invoicing systems or ERP to accept required structured formats.

4. Activate or reassess OSS / IOSS if relevant: If not already done, consider registering for OSS / IOSS service in your country to centralize your VAT obligations. For B2C sales in the EU, this can simplify your procedures.

5. Prepare your cash flow / VAT budget: Plan a reserve for future VAT payments, especially if you must collect or advance VAT in other member states.

6. Train yourself or inform partners: If you have accountants, collaborators, or clients in different countries, share upcoming changes so everyone is aligned.

7. Test on real cases: If possible, test new invoice formats or data submissions with a few clients before D-day to avoid production errors.

8. Monitor national tax announcements: Since this is a European reform, each state has its own implementation dates. Stay alert for tax bulletins or local administration guides.

You're a freelancer based in Madrid, providing digital services (consulting, online training) to clients in France, Germany, and Italy. Before ViDA, you invoiced with French or German VAT depending on thresholds or used OSS to declare.

With ViDA:

- You're required to issue invoices in a structured format recognized by Spain (and potentially transmit real-time flows to tax authorities).

- You continue using OSS to declare VAT for your EU clients through a Spanish one-stop shop.

- If your sales platform integrates certain obligations (e.g. VAT collection on your customer account), you must adjust your terms or verify if the platform supports this aspect.

- You must calculate and provision VAT you collect on behalf of other member states and remit it via OSS periodically (quarterly, monthly depending on your regime).

- You inform your clients in each country of any new mandatory mention on invoices (VAT number, nature code, etc.).

To learn more about working abroad, see our guide to finding your first job abroad.

- The ViDA reform modernizes European VAT with structured e-invoicing, platform accountability, and enhanced OSS / IOSS mechanisms.

- Obligations are not instant in all countries — monitor national transposition.

- If you operate internationally in the EU, adapt your invoicing systems, VAT flows, and cash flow.

- OSS / IOSS remains a central tool: adopt it if it makes sense for you.

- Test early, prepare your templates, train your partners to avoid costly errors.

- This reform aims for better transparency and efficiency, but requires careful adaptation — especially for expats with multiple activities.

If you're starting a business abroad, don't forget to check our complete expat relocation checklist.

ViDA is certainly ambitious, but it addresses challenges of a globalized and digital economy. If you anticipate the necessary adaptations well, you transform a potential upheaval into an opportunity to modernize your operations and gain tax security.

By 2026-2028, systems will be refined, but the secret will be to be ready now — by adopting the right tools, informing your collaborators / clients, and structuring your operations according to new standards.