2035 VAT in the Digital Age requires states with existing domestic e-invoicing to harmonise
The latest draft of EU VAT in the Digital Age required member states with existing domestic B2B and B2C e-invoicing and digital reporting requirements to adapt their regimes by January 2035 to the proposed July 2030 intra-community digital reporting proposals. The effects both electronic invoicing and digital reporting.
Many countries will not be affected based on their light-touch regime proposals, including: Germany; Belgium; France tbc; and Estonia.
Which EU states must modify digital reporting for ViDA
The following countries have or proposed to implement domestic digital reporting that will need to review potential modifications. This is largely because they contain some requirement for pre-clearance of invoices for approval by the tax authorities which the EU views as disproportionatly burdensome for a core activity of billing customers.
- Spain SII, 2017
- Hungary RTIR, 2018
- Italy SDI, 2019
- Romania, July 2024
- Greece, 2025?
- Poland KSef, Feb 2026
- France tbc, Sept 2026
Europe e-invoicing and live reporting
E-invoicing’s role in collecting VAT
Global E-invoicing plays a crucial role in modernising and streamlining the process of collecting Value Added Tax (VAT). By digitizing the invoicing process, e-invoicing enhances accuracy, transparency, and efficiency, which significantly benefits both tax authorities and businesses.
Accuracy and Reduction of Errors
One of the primary advantages of e-invoicing is the reduction of human errors. Traditional paper-based invoicing is prone to mistakes in data entry, miscalculations, and loss of documents. E-invoicing systems automate the entry and calculation of VAT, ensuring that the correct amounts are recorded and reported. This leads to more accurate tax filings and reduces the likelihood of disputes between businesses and tax authorities.
Enhanced Transparency and Compliance
E-invoicing promotes transparency in transactions, as electronic invoices are easily tracked and monitored. This increased visibility helps tax authorities detect and prevent fraudulent activities, such as the creation of fake invoices or underreporting of sales. The digital trail left by e-invoices enables more efficient audits and cross-checking of reported VAT amounts, ensuring compliance with tax regulations.
Streamlined Processes and Cost Efficiency
For businesses, e-invoicing simplifies the process of invoicing and VAT reporting. Automated systems can generate, send, and store invoices electronically, saving time and reducing administrative costs. The integration of e-invoicing with accounting and ERP systems allows for seamless updates of financial records, making it easier for businesses to manage their VAT obligations.
Real-time Reporting and Data Analysis
E-invoicing facilitates real-time reporting of VAT transactions to tax authorities. This immediate exchange of information allows for timely collection of taxes and quicker identification of discrepancies. Additionally, the data collected through e-invoicing can be analysed to gain insights into economic activities and trends, aiding in more effective tax policy making and enforcement.
