The EU reforms its VAT system gradually in the upcoming years

On 14 April 2025, VAT in the Digital Age (ViDA) came into force, radically transforming the rules on invoicing and electronic data reporting by 2030 at the latest, ushering in a new era of VAT administration digitization in Europe.

While there are different effective dates for the elements of the proposed ViDA package, the first significant implementation date is 1 July 2028 in respect of the introduction of a “deemed supplier” rule making platforms facilitating passenger transport and accommodation liable to account for VAT on those supplies in certain circumstances, as well as the extension of the existing one stop shop (OSS) and reverse-charge mechanism for certain supplies. However, it is important that with regard to the deemed supplier rule, Member States are allowed to postpone the effective date to 1 January 2030 at the latest.

Another one is 1 July 2030 in respect of the introduction of mandatory e-invoicing and digital reporting for cross-border EU business-to-business (B2B) and business-to-government (B2G) supplies. However, Member States have or are likely to introduce domestic requirements along similar lines to those included in ViDA at earlier dates, particularly in relation to e-invoicing and digital reporting.

The primary objective of the ViDA package is to curb VAT fraud and to promote the digitalisation of the economy. The development of the concept for its domestic implementation has been ongoing for several months.

The Hungarian implementation will entail a comprehensive renewal of invoicing and data reporting, whereby invoices will no longer merely serve as accounting documents but will become instruments of real-time data exchange between the tax authority and businesses. The system will support the automation of invoicing, receipt and processing procedures not only on the supplier side but also on the customer side, as well as the development of new, more efficient business and tax processes based thereon. The concept also includes the possibility of Hungary’s accession to the Peppol Network, which ensures a uniform and interoperable data exchange framework at international level both between businesses and between businesses and tax authorities.

The Hungarian tax authority (NAV), through the introduction of the ViDA package, is committed to providing new digital services that facilitate the transition to electronic invoicing and support taxpayers in their day-to-day operations.