VAT perspective on e-invoicing in EU
The digitisation of the tax agenda and the related introduction of electronic invoicing (in the form of e-invoicing) is becoming increasingly relevant. During its EU presidency, Belgium pushed forward negotiations with other member states and managed to reach partial agreement over the summer.
ViDA Directive
The digitisation reform is covered by the VAT in the Digital Age (ViDA) Directive, which focuses on three main areas:
- digital reporting and e-invoicing
- platform economy
- single registration and extension of the One-Stop-Shop scheme.
This is already the third draft of the ViDA Directive. For the first and third areas of the reform, there is agreement among all member states on the main idea. The second area, i.e., the platform economy and the introduction of the deemed provider concept, was vetoed by Estonia during the June debate, holding that the draft directive as it stands would infringe on the neutrality of VAT and adversely affect smaller traders who operate below the threshold for mandatory VAT registration. It therefore looks like we will get to see a fourth version of the draft.
E-invoicing
For e-invoicing, the most pressing issues remain to be resolved, regarding the proposed EN 16931 standard according to which the entire e-invoicing system should be set up. At the same time, member states have agreed to further postpone the whole digitisation project. We should join e-invoicing for intra-community transactions in July 2030 at the earliest. Domestic transactions would then be covered by e-invoicing under EU standards no earlier than from 2035.
Under the current Hungarian presidency of the EU, we cannot count on faster developments in tax digitisation. At the same time, there are ongoing negotiations between member states on the content of individual areas covered by the ViDA Directive.