And what does it mean for Irish businesses?

As of March 2026, the European Union is moving towards a more digital VAT system through its VAT in the Digital Age (ViDA) initiative. These changes are designed to modernise how VAT is reported, reduce fraud and simplify compliance, particularly for businesses operating across multiple EU countries.

While ViDA is an EU-wide reform, it will have direct implications for Irish businesses, even where local rules are still being finalised.

What is VAT in the Digital Age (ViDA)?

ViDA is a major reform of the EU VAT system, formally adopted in March 2025. Its goal is to replace traditional VAT reporting, such as periodic returns, with a more real-time and digital approach.

The initiative focuses on three key areas:

• eInvoicing and digital reporting, moving towards mandatory electronic invoices and near real-time reporting of VAT data
• Platform economy rules, making online platforms responsible for VAT in certain cases
• Single VAT registration (OSS expansion), allowing businesses to manage VAT across the EU through a single system

In simple terms, ViDA will make VAT reporting faster, more automated and more transparent.

Key areas of ViDA

EInvoicing and digital reporting:

EU Member States can require eInvoicing for domestic transactions from April 2025. By July 2030, eInvoicing will become mandatory across the EU for cross-border B2B transactions and certain domestic supplies.

For intra-Community transactions:

• eInvoices must be issued within 10 days
• Transaction data must be reported to tax authorities almost immediately

This marks a move away from periodic VAT returns towards real-time reporting. Irish businesses will need to ensure their systems can support electronic invoicing and faster reporting requirements.

Platform economy:

From July 2028, online platforms facilitating short-term accommodation or passenger transport may be treated as the supplier for VAT purposes.

In these cases, the platform will be responsible for charging and remitting VAT, unless the underlying provider supplies a valid VAT number.

The impact in Ireland may vary:

• Passenger transport is generally VAT exempt
• Ireland may delay implementation until 2030
• Smaller businesses may be excluded under SME rules

Revenue has indicated that Ireland is still considering how these provisions will apply locally.

Single VAT registration (OSS expansion):

ViDA expands the existing One Stop Shop system, allowing businesses to manage VAT across multiple EU countries through a single registration.

From 2027 and 2028, this will cover additional transactions, including:

• Certain domestic supplies
• Energy supplies
• Supply and installation contracts

A new OSS module will also allow businesses to report the movement of their own goods between EU countries, removing the need for multiple VAT registrations.

What this means for Irish businesses:

Although some elements are not yet mandatory in Ireland, the direction is clear. VAT is moving towards a fully digital, real-time system.

Irish businesses should now:

• Review invoicing and ERP systems for eInvoicing capability
• Prepare for more frequent and faster VAT reporting
• Monitor Revenue updates on local implementation
• Consider the impact if operating across multiple EU jurisdictions

Contact Gallagher Keane:

ViDA is coming, and early preparation is key. Speak to Gallagher Keane Chartered Accountants to ensure your business is ready for the transition to digital VAT. Contact us at info@gallagherkeane.ie