ViDA Compliance: Why Cross-functional Preparation is Your Competitive Edge

In my work with businesses across Europe preparing for ViDA compliance, one pattern emerges consistently: the organisations succeeding aren't just those with the biggest budgets or most advanced systems. They're the ones where tax, finance, and IT talk to each other. 

The VAT in the Digital Age (ViDA) initiative is transforming indirect tax compliance across Europe. Its goal is to close the EU’s €128 billion VAT GAP and modernise tax systems through digitalisation. ViDA will mandate e-invoicing and near real-time reporting requirements to enhance transparency and reduce fraud.  

The changes will impact every business trading within the EU, regardless of location. Businesses must prepare for continuous transaction controls (CTCs), which validate invoices before processing, and adapt their systems to meet digital reporting obligations.  

This shift elevates compliance from a routine requirement to a driver of operational change. For many businesses, success hinges on one critical factor: cross-functional collaboration. 

Why collaboration matters for ViDA 

No single function can deliver ViDA compliance alone. E-invoicing, CTC, and reporting requirements all depend on integrated systems and robust master data. Success requires tax, finance, and IT working together: 

• Tax brings regulatory expertise but cannot implement systems or manage operational flows without IT and finance.
• Finance owns the processes and data that underpin compliance but needs IT to automate and secure them.
• IT provides digital architecture, scalability, and security but requires tax and finance input to ensure accuracy and business alignment. 

Consider what happens when a business is implementing e-invoicing integrated with an ERP system. Tax defines the validation rules and compliance requirements. Finance ensures that invoice workflows align with payment cycles and cash flow management. IT configures the integration, sets up APIs for real-time reporting, and guarantees data security. Miss any piece of that coordination and problems emerge at go-live.  

Without close coordination, business risks emerge. A rejected invoice under CTC rules doesn’t just impact tax, it can disrupt cash flow, damage supplier relationships, and slow down operations. 

Being prepared can be a competitive advantage 

As mandates roll out and real-time reporting scales, businesses that use ViDA as a springboard for digitalisation will unlock benefits beyond tax compliance:  

• Reduced errors and fraud through automation and robust data governance
• Cost savings from streamlined workflows
• Improved customer and supplier relationships via faster, more transparent transaction processes
• Enhanced ESG reporting and auditability due to accurate, real-time data
• Future-ready compliance with scalable, adaptable systems 

ViDA will also strengthen trust between businesses and EU tax authorities through real-time reporting and harmonised standards. This transparency reduces compliance friction, accelerates VAT refunds, and fosters smoother cross-border trade. For the EU, standardised data enhances policy-making and sustainability reporting, creating a more integrated, resilient, and digitally advanced single market. 

Driving agility and resilience 

ViDA’s phased rollout concludes in 2035, with mandatory e-invoicing and digital reporting for intra-EU transactions coming into force by 2030. Some requirements start as early as 2028. 

Businesses that act now by investing in digital infrastructure and encouraging cross-functional collaboration will not only stay compliant but gain a strategic edge. Well-implemented e-invoicing delivers measurable benefits: faster VAT refunds boost cash flow, fewer invoice rejections reduce operational risk, and stronger supplier trust accelerates procurement cycles. 

Early adopters can benefit even more by positioning themselves as preferred partners in the EU market, winning competitive bids through compliance readiness, and unlocking new revenue streams via frictionless cross-border trade. 

Cross-functional preparation transforms compliance from a reactive obligation into a proactive driver of accuracy, efficiency, and growth. It’s the difference between simply meeting today’s requirements and thriving in a digital-first economy. 

Find out key dates for ViDA with our downloadable timeline.