German companies have barely come to terms with the E-Rechnungspflicht, Germany's e-invoicing mandate applying from 2025, and the next wave of Umsatzsteuer (German VAT) digitalisation is already approaching: ViDA – "VAT in the Digital Age" – the most comprehensive reform of the European VAT system in decades. The EU Council formally adopted the ViDA Directive in March 2025. For Geschäftsführer (managing directors) and finance leads in the German Mittelstand, the country's mid-sized company sector, this means clear action is required – not immediately, but now is the right moment to review your own processes and position yourself in good time.
In this article we explain what ViDA is, which three pillars carry the reform, what is specifically coming for German companies – and how you can prepare for it in a structured way as an Odoo user.
What is ViDA – and why is this reform coming?
ViDA stands for "VAT in the Digital Age" and is a reform package from the European Commission, presented on 8 December 2022 (COM(2022) 701 final). Its aim is to make the European VAT system fit for the digital age – and in doing so to close the substantial VAT gap created by fraud, errors and structural weaknesses. According to European Commission estimates, EU member states lose billions of euros in VAT revenue every year – a considerable share of it through cross-border transactions that are difficult to monitor under the existing system.
ViDA tackles three areas at once:
- The digital reporting requirements for cross-border B2B transactions
- The VAT rules for the platform economy
- The simplification of VAT registration within the EU
The result: more transparency for tax authorities, less administrative burden for companies that operate compliantly – but also new technical requirements for anyone trading or providing services across the EU.
The three pillars of ViDA
Pillar 1: Digital reporting requirements and e-invoicing (DRR)
The heart of ViDA is the introduction of mandatory digital reporting requirements (DRR) for all cross-border B2B transactions within the EU. From 1 July 2030, companies will have to issue a structured electronic invoice for every intra-Community supply of goods and services in the B2B sphere, and report it promptly to the competent tax authorities.
The invoice must comply with the European standard EN 16931 – in Germany, therefore, with formats such as XRechnung or ZUGFeRD, which are already in use for the national e-invoicing mandate. The invoice must be issued within ten days of the chargeable event; the digital report to the tax authority is submitted at the same time as the invoice is issued – so effectively in near real time.
What this means in practice: anyone still running manual or PDF-based invoicing processes for intra-EU sales will have to move them entirely to structured formats by 2030. The good news for Germany: companies that have already implemented the national e-invoicing mandate are well on their way – the existing systems only need to be extended to cross-border use.
Pillar 2: VAT rules for the platform economy
Digital platforms that facilitate services such as short-term accommodation rental (for example through Airbnb-style models) or passenger transport (for example through ride-hailing apps) will in future be treated as so-called "deemed suppliers". This means the platform itself becomes the taxable person and has to charge and remit the VAT on the services it facilitates – regardless of whether the underlying service provider is registered or not.
This rule applies from 1 July 2028. For classic manufacturing or trading Mittelstand companies, Pillar 2 is less directly relevant. For companies that use, operate or integrate platform services within their business model, however, early preparation is decisive.
Pillar 3: Single VAT Registration (SVR)
Until now, companies selling goods or providing services in several EU countries have often had to register for VAT separately in each country – a time-consuming and costly process. ViDA substantially expands the existing OSS system (One Stop Shop), the EU's single portal for declaring VAT due in other member states.
From 1 July 2027, considerably more B2C and B2B transactions can be handled through a single OSS registration point. In addition, the reverse charge mechanism for B2B supplies by non-established suppliers is being extended.
For German companies with sales in France, the Netherlands, Belgium or other EU markets, this means: fewer foreign registrations, less administrative work and a significant cost saving.
The ViDA timetable at a glance
| Pillar | Measure | Applies from |
|---|---|---|
| Pillar 3 – SVR | Extended OSS use for B2C and B2B, extension of the reverse charge | 1 July 2028 |
| Pillar 2 – Platforms | Deemed supplier rule for short-term rental & passenger transport | 1 July 2028 |
| Pillar 1 – DRR | Digital reporting obligation + structured e-invoice for cross-border B2B supplies | 1 July 2030 |
The timetable gives German companies lead time. But experience shows that anyone who begins the technical implementation only 18 months before a compliance deadline comes under pressure. Anyone who plans now keeps every option open.
What ViDA means in practice for German companies
For the German Mittelstand, two dimensions are particularly relevant:
The technical dimension: moving to structured e-invoices for intra-EU sales is not a switch you flip in 2029. ERP systems have to be configured so that they can generate invoices compliant with EN 16931 and transmit reports to the tax authorities of the respective recipient countries. Companies that adopt a modern system such as Odoo today are building a foundation that covers both the current German e-invoicing mandate and the future ViDA requirements – without maintaining two parallel system landscapes.
The organisational dimension: finance departments have to rethink their processes for cross-border invoices. Which EU customers and suppliers are affected? Which systems are already reaching their limits today? An early gap analysis saves considerably more effort in 2029 than a rushed last-minute migration.
Companies in mechanical engineering (Maschinenbau), wholesale and foreign trade and logistics are particularly affected – precisely the sectors that traditionally form the backbone of the German Mittelstand. For them, ViDA is not a footnote in tax law but a strategic question about their systems.
ViDA and the German e-invoicing mandate: two reforms, one system
Since 1 January 2025, German companies have had to be able to receive structured e-invoices (XRechnung or ZUGFeRD) in the B2B sphere. The obligation to issue them applies to companies with prior-year turnover above €800,000 from 1 January 2027, and to all other companies from 1 January 2028 (under the Wachstumschancengesetz, BGBl. 2024).
ViDA builds on the same technical formats – and that is no coincidence. The EU deliberately encouraged the national implementation of e-invoicing mandates as preparation for ViDA. So anyone who has done their homework on XRechnung and ZUGFeRD is already technically a long way ahead.
The decisive difference lies in the scope: while the national e-invoicing mandate applies only to domestic B2B transactions, ViDA extends these requirements to all cross-border EU B2B supplies – and adds a direct reporting obligation to the tax authorities. That means the same system has to work for considerably more transactions and additionally provide a reporting interface to the authorities in the recipient countries.
In Odoo, both can be handled on a single platform. The German e-invoicing modules for XRechnung and ZUGFeRD are already included as standard; the European DRR reporting modules will become available progressively as ViDA is rolled out.
How doo.FINANCE supports your SME with ViDA
As an Odoo Gold Partner with teams in Germany and across Europe, doo.FINANCE supports mid-sized companies through exactly this kind of compliance transformation. Our services around ViDA and e-invoicing:
- ViDA readiness analysis: review of your current processes and system landscape for ViDA gaps
- Odoo implementation: configuration of XRechnung, ZUGFeRD and cross-border e-invoicing modules
- OSS setup in Odoo: preparation for the extended Single VAT Registration from 2027
- Tax advisory: assessment of the ViDA impact on your specific EU sales and supply chains
- Interface setup: preparation for the digital reporting requirements from 2030
Talk to us now. The earlier you begin planning, the smoother the implementation – and the more time your finance department has to concentrate on what matters. Contact us for a free call with the doo.FINANCE team in Germany →
Frequently asked questions about ViDA
When does ViDA apply to my company?
The first ViDA measures (Pillar 3 – Single VAT Registration) apply from 1 July 2027. The platform rules (Pillar 2) take effect from 1 July 2028. The most important change for most German companies – the digital reporting requirements for cross-border B2B supplies (Pillar 1) – applies from 1 July 2030. The formal starting signal came with the adoption of the Directive by the EU Council in March 2025.
Will ViDA mean registering for VAT again in other EU countries?
On the contrary: ViDA is designed to simplify exactly that. Through the expanded OSS (One Stop Shop) from 2027, existing or future foreign registrations will fall away for many companies. Whether your current EU registrations are affected depends on the transaction type and the country – an individual analysis is worthwhile.
Is it enough that we already use XRechnung or ZUGFeRD?
Technically you are well positioned – but not finished. The formats (EN 16931) are the same. What ViDA additionally requires is the transmission of the invoice data to the authorities, together with the ability to do this in an automated way for transactions with EU partners. An Odoo system already configured for the German e-invoicing mandate can be extended to ViDA with manageable effort.
What distinguishes ViDA from the German e-invoicing mandate?
The national e-invoicing mandate concerns domestic B2B transactions and requires structured invoice formats. ViDA adds the cross-border dimension: from 2030, all B2B supplies between companies in different EU countries must be issued as a structured e-invoice and reported digitally.
Can Odoo cover the ViDA requirements in full?
Yes – as a European ERP platform, Odoo is built around EU compliance. The existing modules for XRechnung, ZUGFeRD and OSS will be extended with DRR reporting functionality in line with the ViDA deadlines. As an Odoo Gold Partner, doo.FINANCE implements these modules and makes sure your configuration meets the country-specific requirements.