Member states freed to mandate e-invoicing without Commission approval; obligation for customer to agree to e-invoicing scraped January 2024
In order to facilitate the rapid adoption of e-invoicing, the European Commission has proposed to reform the legal hurdles (Articles 218 and 232, EU VAT Directive) member states face to mandate the requirements. As part of the Digital Reporting Requirements pillar of the VAT in the Digital Age reforms, the EC will mandate the use of e-invoicing for all intra-community B2B transactions. This, and any member states’ digital transaction reporting regimes will conform with EN-16931, the EU e-invoicing standard, requiring a newly-defined structured e-invoice for intra-community supplies.
Sign-up our free VAT newsletter for international updates.
Article 217 of the VAT Directive will be amended from 1 January 2024. In addition to it containing the VAT information required by the Directive, it must be issued, transmitted and received in a structured electronic format with allows for its automative and electronic processing.
EC and customers’ prior approval scrapped
The two existing VAT Directive restrictions on e-invoicing to be reformed from January 2024 are:
- The EU VAT Directive (Articles 218) currently requires member states to accept paper or electronic invoicing. Paper and e-invoices has equal legal status. Member states must therefore first seek an evaluation and approval from the EC before imposing electronic invoicing-only within their state. This is subject to the unanimous agreement of the Council based on a proposal from the Commission. The VAT Directive will be amended to withdraw this prior permission to derogate from the EU VAT Directive. In the longer term, e-invoicing primacy over paper invoices will be imposed.
- Suppliers are today free to introduce e-invoicing in the EU, but must seek the permission of the customers if they wish those to replace the role of paper-issued invoices – Article 232, EU VAT Directive. Again, this obligation will be withdrawn in the Directive.
The introduction of mandatory e-invoicing for intra-community supplies will mean the withdrawal of EC Sales List requirements in 2018.
EU VAT in the Digital Age reforms
| EU VAT in the Digital Age | |
| 3 reforms to improve efficiency of VAT for all and reduce fraud | |
| 1. Single VAT registration in the EU; extension of OSS to B2C own stock movements | 2025 (?): Following the 1 July 2021 introduction of the One Stop-Shop (OSS), extended to cover movement of own stocks prior to cross-border B2C to reduce the foreign, non-resident VAT registrations & returns. Plus to movements of own stock with ending of 'call-off' stock burden |
| More details on Single VAT Registration in the EU | |
| Marketplaces deemed supplier for EU sellers | |
| EU IOSS mandated for marketplaces | |
| EU tackles misuse of IOSS numbers | |
| Quick fixes to existing e-commerce VAT rules | |
| Call-off stock VAT simplification ends | |
| Harmonisation of B2B Reverse Charge rules | |
| 2. Digital Reporting Requirements; e-invoicing | 2030 (?): Mandatory digital reporting of intra-community transactions; obligation to be able to issue and receive intra-community e-invoices; member states free to impose own e-invoicing or real-time reporting but most conform to EU e-invoice standard EN 16931 |
| Read more about EU Digital Reporting Requirements (DRR) | |
| E-invoices mandated intra-community supplies 2028 | |
| EC Sales lists replaced by Digital Reporting Requirements | |
| 2014 EU legal permissions for e-invoicing lifted | |
| 3. VAT treatment of the platform economy | 2026 (?): Travel & accommodation sharing platforms to become deemed supplier / liable to users' VAT. New definitions of the roles of providers, users and platforms to avoid double and no-taxation |
| Read more - Travel & accommodation platforms deemed suppliers for EU VAT | |
