ViDA Pilot: Supporting ViDA via 5-corner e-invoicing Peppol Network
The Open Peppol network has started in December 2024 its pilot program to demonstrate how Peppol 5-corner model can facilitate compliance with the B2B VAT in the Digital Age‘s first Pillar of reforms, agreed in November 2024, Digital Reporting Requirements (DRR).
The pilot has recruited over 100 participants and tax authorities. It then moves to the design phase early next year, for build and testing in Spring and Summer 2025.
This pilot is designed to showcase how Peppol’s established 5-corner model can help simplify VAT compliance and foster a more streamlined digital economy across Europe. The project will involve close collaboration with tax administrations, service providers, and businesses throughout Europe.
A similar Nordics ViDA e-invoicing pilot was undertaken earlier this year.
Peppol’s ViDA Pilot Phasing
- December 2024: The project kicks with the development of a detailed project plan, recruitment of participants, and gathering of technical and business requirements from stakeholders.
- Spring 2025: By the first half of 2025, the Peppol team aims to complete the initial design of the DRR architecture and related artefacts, laying the groundwork for testing.
- Summer 2025: In the latter half of 2025, the pilot will move into a testing phase where the new architecture and specifications will be validated in collaboration with participating tax administrations, service providers, and businesses.
Peppol Network and Its Role in e-Invoicing
Peppol (Pan-European Public Procurement On-Line) is a network that allows businesses to exchange electronic procurement documents, such as e-invoices and purchase orders, across borders within a standardized framework. The Peppol network facilitates efficient, secure, and reliable exchanges of documents between businesses and government entities (B2G) as well as between businesses (B2B).
Peppol uses a 4-corner or 5-corner model, where four participants (buyer, seller, and their respective service providers) exchange e-documents over the Peppol network. In the 5-corner model, an additional role is introduced, which could be a tax administration or another entity requiring information. This system is highly effective in cross-border business environments as it ensures that documents conform to a single set of standards.
Peppol is a global solution that has expanded beyond Europe, but it is especially relevant in the context of the European Commission’s push towards more digitized tax processes.
Peppol ViDA Pilot plan
1. Peppol Network Supporting ViDA Requirements:
The Peppol network will be leveraged to support the ViDA proposal’s requirements for e-invoicing and DRR. The focus will be on ensuring that Peppol’s standards for document exchange can facilitate the real-time VAT reporting required under ViDA.
2. B2B and B2G Invoicing:
The pilot will primarily focus on B2B (business-to-business) and B2G (business-to-government) transactions, both domestically and across EU member states as intra-community supplies. These are key areas where the ViDA proposal introduces mandatory e-invoicing and digital reporting obligations.
3. Development of Comprehensive Use Cases and Architecture:
Peppol will document relevant use cases for both e-invoicing and digital reporting to guide future implementations. Additionally, the pilot will focus on designing a comprehensive e-invoicing and DRR architecture based on the Peppol 5-corner model. This architecture will serve as the foundation for VAT reporting compliance.
4. Creation of Peppol Specifications for DRR:
Under the DRR framework, Peppol will create specific specifications for sales and purchase invoice reports. This will include two sub-types for sales invoices and three for purchases, along with the corresponding Schematrons, which are a form of validation for XML documents. These specifications are critical for ensuring the accuracy and consistency of VAT reporting across borders.
5. Technical Environment for Pilot Registration and Document Exchange:
To facilitate the pilot, Peppol will establish a technical environment where participating businesses and tax administrations can register and test the new system. This environment will enable the exchange of invoices and other business documents in a controlled setting, allowing for testing of real-world scenarios and ensuring the viability of the new architecture.
