VAT in the Digital Age - E-invoicing update
Alison Horner · Posted on: March 19th 2024 · read
In 2022 the EU announced a number of initiatives to modernise the EU VAT system and to protect the EU from a growing VAT gap of an estimated 93bn Euro due to VAT fraud and non-compliance.
The main focus of the VIDA initiatives is a move towards real time digital reporting by having mandatory e-invoicing, which we are commentating on here.
Other initiatives are the introduction of a single VAT registration for B2C sales and other mandatory measures for platform sales to consumers.
An important meeting happens in May 2024 to try to reach agreement, between the Member States and push the changes forward. Over recent months we have seen delay after delay announced and dates being pushed back to enable this enormous regime change to be implemented.
So what does this mean to our UK businesses VAT registered in the EU and trading there?
Put simply it is important to keep up to date with the proposals and to focus on any outcome of the May 2024 meeting which we will update you about.
E-invoicing update from across Europe
We pick out a few countries below:
- Poland Compulsory B2B invoicing using mandatory system KSeF from July 2025. Foreign companies with no Fixed or Permanent establishment likely to be exempt in the short term.
- Portugal Already advanced and foreign companies need to use certified software which will generate unique ATCUD codes and monthly VAT reporting via SAF-T billing.
- Romania - July 2024 Move towards e-Factura platform and using EU standard for invoicing – EN16931.
- Spain Introducing e-invoicing in 2025.
- Belgium/France/Croatia B2B e-invoicing in 2026.
- Germany Delayed to 2027 at the earliest.
- Netherlands’ and Sweden No mandate at the moment.
What steps need to be taken now to prepare
The key message to our readers – just like Brexit EU E-invoicing is not going away and must be on the risk register for future investment in software and IT capabilities when trading in the EU. Sadly, E-invoicing does not mean emailing an invoice. This is real time data with prescribed EU invoicing standards and validation checks. It is a big project underpinning regime change to VAT in the EU.
Get in touch
If you have any questions on E-invoicing or are unsure whether your business needs to review its obligations under VIDA regulations, please get in touch.
Contact the team
