How the EU Digital VAT is being enforced in the U.S.

New survey data from the Thomson Reuters Institute reveals that confidence in ViDA compliance is running well ahead of actual preparation levels for EU organizations. For U.S. indirect tax professionals overseeing global operations, that gap is your responsibility too.

Jump to ↓FAQ

What is the ViDA bystander effect?

The ViDA confidence curve

Why U.S. indirect tax leaders should influence the ViDA response

Why ViDA non-compliance is a business continuity risk rather than just a tax penalty

Why fragmented ViDA preparation fails

How to build a ViDA readiness program

FAQ

What is ViDA and why should a U.S. indirect tax professional care?

VAT in the Digital Age (ViDA) is the European Union’s sweeping overhaul of how value-added tax is reported, validated, and exchanged across all 27 member states, introducing mandatory e-invoicing, real-time digital reporting, and cross-border data exchange that together move VAT compliance from a periodic, back-office function into the real-time core of how a business operates every single day.

Is this really my responsibility if I’m based in the U.S.?

Yes. If your organization has EU subsidiaries, sells into EU markets, or works with EU-based suppliers, ViDA is already your responsibility too. The trends driving ViDA, including digital reporting mandates, real-time transaction controls, government-connected invoicing, are accelerating globally. The EU is the largest and most complex rollout happening right now, but similar frameworks are emerging across Latin America, Asia-Pacific, and beyond.

The EU team handles VAT. Why does this involve me?

It involves you because the data shows that your EU teams are in a state of compliance confidence that has not yet been stress-tested by operational reality. More on that below.

Is 2030 far enough away that we can wait?

No. Individual EU member states including Belgium, Poland, and France are already rolling out domestic mandates now. This is not a single future deadline. It is a growing set of parallel requirements that must be managed today.

What is the ViDA bystander effect?

The bystander effect, a well-documented psychological phenomenon, occurs when everyone assumes someone else is handling a situation, and as a result, no one handles it. The more people present, the less any single person feels personally responsible for taking action. Everyone sees the problem, but everyone assumes it is covered, so nothing gets done.

That is what the data from the Thomson Reuters Institute’s 2026 ViDA Readiness Report shows is happening with ViDA readiness across EU organizations right now.

According to the report, 86% of EU tax and finance professionals say they are familiar with ViDA, and 87% say they are confident their organization is on track to achieve compliance by the 2030 deadline. On the surface, that sounds like a workforce that has things under control.

However, only 35% of those respondents say they have a detailed understanding of what ViDA compliance requires. That means two-thirds of tax and finance professionals surveyed are operating on surface-level awareness, aware enough to feel covered, not deep enough to know what they are missing.

In fact, 78% of respondents say their organization does not yet have a ViDA transition program with central governance in place. The largest single group, 39% of all respondents, is approaching preparation on a fragmented, country-by-country basis, with activities distributed across jurisdictions without coordinated oversight.

This is the ViDA bystander effect. Your EU colleagues are not ignoring the problem. They are aware of it, feel reasonably confident about it, and are collectively assuming that someone else in the organization has the game plan locked down. The data shows that in most cases, nobody does.

The ViDA confidence curve

The most clarifying finding in the Thomson Reuters Institute’s 2026 ViDA Readiness Report is what it calls the “Confidence Curve,” a pattern showing how organizations’ confidence in ViDA readiness shifts depending on where they are in the preparation journey.

Among organizations with no formal program or only fragmented country-by-country activity, 90% say they feel confident in their organization’s ability to achieve compliance on time. That early confidence is genuine and understandable. Organizations at this stage have not yet had to stress-test their assumptions against the full complexity of multi-jurisdictional compliance, real-time reporting requirements, and the data governance foundations that underpin all of it. As the report puts it, many businesses simply “don’t know what they don’t know yet.”

As organizations move into the assessment and planning stage, confidence shifts. The percentage of respondents who say they are “not very confident” doubles during this phase, as teams begin to encounter the real scope of what ViDA requires. Confidence only strongly rebounds among organizations that have reached the stage of having a funded, centrally governed program, where 98% of respondents feel confident. According to the report, only 22% of all organizations surveyed have reached that stage.

For U.S. indirect tax leaders, this curve is the most important piece of context for interpreting the status updates coming from your EU footprint. If your EU teams are expressing confidence today, they are likely expressing pre-assessment confidence, which is exactly where the data says most organizations are right now. That is not a failure. It is a starting point, and it is a signal that a more structured, centrally governed approach is ready to be built.

Why U.S. indirect tax leaders should influence the ViDA response

The data presents an opportunity for U.S. indirect tax leaders. Since tax professionals are more knowledgeable and closer to compliance operations than their counterparts in finance, it is imperative that the tax department communicates clearly and frequently to senior management about ViDA readiness.

That means you, as a U.S. indirect tax leader with visibility across the full EU footprint, are the right person to step in. Not to second-guess your EU colleagues, but to bring the cross-border perspective that no single-country team can provide on its own. You can be the one who connects the dots across jurisdictions, elevates the conversation to the C-suite, and builds the governance structure that turns your EU teams’ awareness into funded, coordinated action.

The organizations that move early on centralized governance will come out the other side with better data quality, faster payment cycles, standardized processes across EU markets, and a tax function that has earned a seat at the strategic table.

Why ViDA non-compliance is a business continuity risk rather than just a tax penalty

Some U.S. indirect tax professionals still treat ViDA as a European problem to monitor from a distance while the EU teams sort it out. That framing is worth revisiting.

If your organization transacts in the EU, ViDA is already shaping how EU digital VAT is being enforced across the markets you operate in. The trends driving ViDA adoption globally mean that the compliance infrastructure your organization builds now will either position you ahead of the next wave of digital reporting requirements or have you rebuilding jurisdiction by jurisdiction.

More immediately, the risk of falling behind is not primarily a penalty risk. In a real-time reporting environment, failure to produce a compliant e-invoice can halt your organization’s ability to transact business in affected markets entirely, because customers cannot process payment without a valid digital record. According to the Thomson Reuters Institute’s report, 54% of respondents say invoice rejection or non-payment by customers is their top non-compliance concern. Business disruption (45%) and reputational damage with partners (45%) ranked higher than financial penalties (44%).

That is the conversation your CFO needs to hear. Not “we might face a fine” but rather “we might lose the ability to invoice and collect payment in key EU markets.” That reframe changes the urgency and the budget conversation entirely.

Why fragmented ViDA preparation fails

More than four in ten respondents say their organization is approaching ViDA preparation on a fragmented, country-by-country basis. This is the most common default, and it is also the most expensive one in the long run. Each EU team solving the problem independently creates duplicated effort, inconsistent data standards, and compliance gaps that multiply as more member states activate their individual mandates.

The technology decision matters here too. Early-stage organizations often begin by exploring extensions to their existing ERP systems. As organizations mature in their assessment, most recognize the limitations of ERP-only approaches for managing up to 27 different domestic frameworks simultaneously. By the time organizations reach the funded, embedded stage, around half have elected to adopt specialized third-party solutions.

Managing real-time e-invoice issuance and VAT reporting across multiple EU member states, each with different domestic mandates and timelines, requires more than an ERP extension. ONESOURCE Pagero is purpose-built for exactly this kind of multi-jurisdictional complexity, centralizing governance and standardizing data across borders without requiring each EU team to solve the problem independently.

How to build a ViDA readiness program

The Thomson Reuters Institute’s 2026 ViDA Readiness Report outlines a maturity-based action plan. For organizations with fragmented or no formal programs, the immediate priorities are clear.

Designate a ViDA lead with C-suite sponsorship
Map your full EU VAT registration and transaction footprint
Build a coherent cross-border data architecture before committing to a specific technology approach
Make sure the tax function is driving that conversation, not waiting for IT or finance to schedule it

Waiting for 2030 is not a strategy. It is the bystander effect wearing a calendar. The data is clear on who in the organization has the knowledge, the perspective, and the standing to act. That person is you.

Download the full 2026 ViDA Readiness Report from the Thomson Reuters Institute to see the complete data, the country-by-country readiness breakdown, and the maturity-based action plan your organization can use to assess where it stands and what to do next.

Want to understand how ONESOURCE Pagero can help centralize ViDA compliance across your EU footprint? Explore ONESOURCE Pagero.