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by Aleksandra Bal October 24, 2025
The European Union is implementing “VAT in the Digital Age” (ViDA) – a major reform of the VAT system which will mandate e-invoicing and expand tax collection obligations for platforms. The rollout will span a decade, with most important measures taking effect in 2028 and 2030.
While TaxJar supports sales tax compliance in the US, retailers that are considering expanding to new countries should be aware of global tax compliance changes.
To help, we asked an expert from our parent company , Stripe, to help simplify these concepts. Aleksandra Bal is the Global Indirect Tax Technology Lead at Stripe, leading a team focused on developing tax technology solutions and managing indirect taxes across six continents.
Before we get into the recent VAT reforms, let’s recap what VAT is. VAT stands for value-added-tax, and is generally a broad based tax on goods and services that are consumed in a particular European country. Similar to the US, each country can set their own VAT rates.
Unlike the US sales tax system, the VAT system is a multi-stage tax that is imposed at every step of the supply chain. The VAT is due in the country of consumption regardless of the country of the seller. That makes imports from the US subject to VAT when consumed in Europe. Like US sales tax, VAT rules are complex and can become tedious when applied to specific transactions and cross-border transactions.
The European Union’s “VAT in the Digital Age” (ViDA) reform package, approved by the ECOFIN Council in March 2025, is set to bring major updates to the EU VAT system. In September 2025, the European Commission released its long-awaited implementation plan that moves the reforms from concept to execution.
The ViDA reform consists of three pillars:
We’ve outlined the list of proposed measures and their implementation date below.
Not all businesses will be impacted by ViDA the same way. For example, EU-based businesses that sell goods or services to other businesses in the EU will see the most changes, but non-EU businesses that sell digital services into the EU but have no physical operations in the region won’t be affected.
In some scenarios, ViDA could reduce compliance challenges. For example, e lectric vehicle charging operators will be able to manage VAT through a single EU registration instead of navigating multiple national systems.
This reform package is full of updates businesses must consider, and while that can be overwhelming, the European Commission will continue to provide guidance and technical details to ensure businesses understand how to implement these changes. Additionally, the Commission will provide opportunities for regular dialogue with the business community through the reform rollout process to give businesses the chance to share concerns and ask questions.
While TaxJar helps businesses manage their US sales tax requirements, Stripe has a tax solution, Stripe Tax , that can help businesses comply with VAT requirements. You can learn more about Stripe Tax here. If you need help managing your US sales tax obligations, start a free, 30-day TaxJar trial today .
Looking for a tax rate for another country? We recommend using Stripe’s VAT calculator or GST calculator .
Aleksandra holds a Ph.D., MBA, LLM, and several other degrees in taxation and computer science.
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