B2B Peppol structured e-invoicing in fight to combat VAT fraud
The Saeima Latvian Parliament approved on 31 October 2024 an update to the Accounting Law to introduce mandatory structured e-invoices on B2B transactions by resident businesses. There will be two phases:
- Jan 2025: B2G; and
- Jan 2026: B2B
Regulations on the issuance of e-invoicing should be provided in the forthcoming months.
There will be no immediate requirement to simultaneously report the e-invoicing to the government for pre-clearance checking – but this is likely to be clarified shortly. The government may offer a free e-invoicing platform to support the new mandate.
The Government has said regulations developed to prescribe rules regarding the B2B invoicing obligations, including procedural rules and technical specifications. Invoices will either be able to submitted via:
- a free national delivery solution;
- PEPPOL services providers; or
- directly between taxpayers, when agreed between the two parties.
Latvia estimates its VAT Gap (missing tax revenues) is €162 million per annum.
Under the EU invoicing rules, Latvian public and government institutions must accept Business-to-Government electronic invoices. This is based on the PEPPOL standard – European Electronic Documents and e-Invoicing Network. Voluntary e-invoicing for B2B transactions is available via a number of routes today in Latvia:
- Via the government’s ePakalpojumi platform
- The capital’s authorities in Riga has an e-service option
- The public authorities’ own e-address
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Latvia joins European dash for transaction-based VAT reporting
Latvia will join Italy’s SdI pre-clearance model, which Belgium, Bulgaria and France are rolling out in the forth coming 24 months. Whilst others have opted for post-issuance live invoice reporting, including Hungary, some like Spain e-invoicing proposal show a switch to the model used across South America and Asia.
EU VAT in the Digital Age reforms include a channel for harmonised Digital Reporting Requirements (DRR) and Continuous Transaction Controls (CTC) by EU states. This grew from the 2020 Tax Package proposals for a fairer and more efficient EU tax regime.
VAT Calc’s VAT Calculator tax engine can provide live global VAT or GST determination for your e-invoicing or real-time reporting obligations.
PEPPOL – EU standard for einvoicing going global
(Pan-European Public Procurement Online) is a set of specifications maintained by the OpenPEPPOL non-profit organisation with the aim of standardizing cross-border, electronically supported procurement procedures. PEPPOL is managed by the OpenPEPPOL Association. It features, among other things, electronic invoicing. In addition to specifications PEPPOL consists of a delivery network. It started off as a development project with the same name under the European union Competitiveness and Innovation Programme from May 2008 to August 2012.
