Regulatory updates - European Union

The Council has reached a provisional agreement on new measures to strengthen the fight against VAT fraud across the EU. The framework aims to improve cooperation between member states and EU bodies, including the European Public Prosecutor’s Office (EPPO) and the European Anti‑Fraud Office (OLAF), by granting them more direct access to key VAT data.

Under the new rules, EPPO and OLAF will be able to access information on cross‑border business transactions, including data held by Eurofisc, the EU’s anti‑VAT fraud network. This will allow investigative bodies to obtain first‑hand information more quickly, accelerating investigations and improving coordination between authorities.

The measures specifically target cross‑border VAT fraud, including missing trader intra‑community fraud (carousel fraud), which continues to cause significant revenue losses across the EU. The enhanced access to data is expected to strengthen detection capabilities and support faster enforcement actions.

Impact

The improved cooperation framework is designed to reduce VAT fraud losses, estimated at billions of euros annually, while ensuring a more level playing field for compliant businesses. By increasing transparency and enabling quicker investigations, the rules aim to enhance the overall effectiveness of VAT enforcement across the Union.

Next steps

The new rules are part of an amendment to Council Regulation 904/2010 on administrative cooperation and combating VAT fraud. Following the expected opinion of the European Parliament, the Council will proceed with formal adoption. The regulation will enter into force twenty days after publication in the Official Journal of the European Union.

The EU Commission’s announcement of the availability of the 2026 Work Programme for VAT in the Digital Age (ViDA) builds on the implementation strategy released in September 2025. The intent is to support the rollout of the ViDA package under the current Multiannual Financial Framework.

Aimed at modernizing the EU's value-added tax (VAT) system, reducing VAT fraud, and addressing challenges posed by the platform economy, the reforms will occur in stages beginning January 2027, addressing OSS (One Stop Shop) matters, and in 2028, addressing platform economy measures, through July 2030, when e-invoicing and DRRs become obligatory. The final milestone is 2035, when Member States with existing domestic digital reporting requirements must align with the ViDA’s intra-community framework.

To manage implementation risks, including IT readiness, fragmented implementation, and more, by Member States that introduce additional obligations beyond EU standards, the Commission has outlined a range of support mechanisms, including detailed explanatory notes, the technical support instrument (TSI), the fiscalis programme, and, where necessary, penalty procedures against Member States that fail to transpose the Directive on time.

For further information on the work programme, please visit the European Commission’s dedicated page.

ONESOURCE Pagero, an active contributor to the Peppol ViDA pilot, has reached the first milestone by successfully passing the initial conformity test for access points operating under the 5-corner model designed for ViDA compliance.

Under the ViDA package, adopted on March 11, 2025, mandatory intra-Community e-invoicing and digital reporting requirements (DRR) will take effect from July 1, 2030.

The Peppol ViDA pilot was officially launched in December 2024. It is designed to demonstrate how the 5-corner model can support compliance with intra-Community e-invoicing and DRR obligation.

More than 100 participants, including 20 Tax Administrations, Peppol authorities, service providers, and businesses, are involved in the pilot. Together, they are defining the e-invoicing and DRR architecture needed to support these obligations, as well as the specifications required to support them.

This conformance test demonstrated, among others, ONESOURCE Pagero’s ability to generate EN-compliant e-invoices, EN-compliant DRRs, exchange these in real-time with tax administrations and other service providers, as well as process response messages generated by all parties invoiced in a 5-corner exchange.

We look forward to real-life ViDA pilot testing, which is to be scheduled soon, and are ready to support those customers who would like to join the pilot together with us. If you have questions about ViDA and how to prepare your business, feel free to reach out here.