ViDA, the European Union's VAT in the Digital Age reform package, makes Article 194 of the VAT Directive mandatory from 1 July 2028: whenever a business sells goods or services in a country where it isn't established and isn't registered for VAT, and the buyer is already VAT-registered in that same country, the duty to calculate and pay the VAT shifts automatically to the buyer. This is not a brand-new, general cross-border reverse charge covering every EU purchase. It's a narrow rule that kicks in only when a foreign seller is trading in a local market without a local VAT number.
The four conditions that decide the liability
Before you decide an invoice needs reverse-charging, run it through the four conditions set out in Directive (EU) 2025/516: the seller is not established in the buyer's country; the seller holds no individual VAT number there; the buyer is already VAT-registered in that country; and the transaction isn't taxed under the margin scheme (a special VAT regime for second-hand goods that taxes only the seller's profit margin, not the full sale price). If all four hold true, the invoice carries no VAT, and the buyer declares it themselves.
What happens if the seller already has a local number or a presence?
If the foreign supplier is already VAT-registered in the buyer's country, or has a fixed establishment there that actually takes part in the deal (a real office, warehouse or staff involved in making the sale happen, not just an administrative address), the mandatory 2028 rule doesn't apply. Liability then falls back on whatever rules each member state already has in place. Estonia already runs on that principle an Estonian business must account for VAT on goods and services bought from a foreign, Estonia-unregistered seller, provided that the seller's Estonian establishment does not actually participate in the transaction. in Latvia State Revenue Service (VID) sets out a reverse-charge regime limited to specific goods categories, such as scrap metal and construction services, and in Lithuania State Tax Inspectorate (VMI) explains that a buyer of goods located in Lithuania declares the seller's VAT on form FR0600 whenever the seller is neither established nor registered in Lithuania. The 2028 change does not wipe out any of these domestic categories.
What must the invoice and the VAT return show?
From 1 July 2028, the invoice must state the buyer's VAT number, the number under which the buyer will account for the VAT, and the seller has to issue that invoice no later than the 15th day of the month following the month the supply took place. Double-check that you've handed the seller your correct local VAT number, because the seller reports the transaction in their own recapitulative statement (the EU's cross-check summary of intra-EU sales), and a wrong number means your reverse-charge entry won't match up when the tax authority runs its cross-check.
Does this end up costing you anything?
Usually not. If what you bought goes towards taxable business activity, you deduct the same amount as input VAT in the same period: the VAT you charge yourself and the VAT you reclaim cancel each other out. In Lithuania, for instance, VAT is calculated on form FR0600 is due within 25 days of the end of the period, but if you have deduction rights, that same amount comes back to you. If the purchase relates to VAT-exempt activity, part of that VAT becomes a real cost, exactly as it would with any ordinary purchase invoice.
Is this connected to the 2030 e-invoicing rule?
The 2028 reverse charge is about who owes VAT on a specific transaction, full stop. A separate deadline sits further down the ViDA timeline: member states must implement the Article 5 measures from 1 July 2030, when the digital reporting obligation, a requirement to report transaction data electronically to tax authorities close to real time, extends to every VAT-registered person, but only for the transaction categories listed in Article 262, including special treatment for VAT-exempt goods and services. These are two different deadlines inside the same ViDA package, and they get mixed up constantly simply because they share the name.
FAQ
When will the ViDA reverse charge obligation for the buyer come into effect?
From July 1, 2028. If the foreign seller is not established in the buyer's country or registered as a VAT payer there, the obligation to calculate and pay VAT automatically passes to the buyer.
What four conditions must be met for reverse charge to apply?
The seller is not established in the buyer's country; the seller does not have an individual VAT number there; the buyer is already registered for VAT in that country; and the transaction is not subject to the margin scheme for second-hand goods.
Will reverse charge become a real cost for the buyer in 2028?
In most cases, no. If the purchased goods or services are intended for a taxable business activity, you deduct the same amount as input VAT in the same period. If the purchase is related to a tax-exempt activity, part of the VAT remains as an actual expense.
Is the 2028 reverse charge related to the 2030 e-invoice rule?
No, these are two different deadlines in the ViDA package. The 2028 change concerns the VAT liability of a specific transaction, while in 2030 the digital reporting obligation will extend to every VAT payer.