EU ViDA Digital Reporting Requirements & e-invoicing 2030-35

ViDA Pillar 1, Intra-community EU Digital Reporting Requirement & e-invoicing 2030; full EU and domestic harmonisation 2035

As part of the EU ViDA reforms, EU Finance Ministers gave political agreement to Pillar 1, Digital Reporting in May 2024. One of the other pillars, Pillar 3, Digital Platforms, is held-up, but should gain agreement over the summer.

Digital Reporting includes 2030 plans to introduce near-real time digital reporting and e-invoicing on intra-community goods and services supplies. Member states will then have to harmonise any existing transaction reporting with the new regime by 2035.

July 2030 Digital Reporting Requirements

Digital Reporting of intra-community transactions to tax authorities

• Introduction of Digital Reporting Requirements (DRR) for suppliers and their customers of header-level data of:
  • intra-community: supplies; acquisitions; B2B services;
  • reverse charge when the supplier is not established;
  • supplies of energy to a taxable dealer; and
  • triangulation.
• There have been a number of compromises to this proposal to reflect practical burdens:
  • The reporting deadline has been extended to 5 days from 2 days from issuance of the e-invoice.
  • Member states may exempt customers of goods or services from also reporting the transaction if they can obtain assurances by other means.
  • In addition to the existing information required of recapitulative statement, additional information will be required including bank details to enable tax authorities to track payments.
• Withdrawal of ESL recapitulative reporting since is now supplanted by the new DRR regime, above.
• Domestic transaction reporting schemes will remain an option. Existing schemes, such as SAF-T on domestic reporting, may remain in place.
• Central VIES – EC operated transaction database
  • A new ‘Central VIES’ central database will be overseen and maintained by the EC, and will include DDR transactions and ID info of taxpayers, including their VAT identification number. It will also have some integration into the Customs Surveillance system and the upcoming Central Electronic System of Payment CESOP information
  • It will also give transparency for customers to see what intra-EU transactions are being reported against their VAT numbers. This will help prevent them potentially being caught-up in VAT frauds unaware. This may be enabled by a common EC endpoint.

Mandatory structured e-invoicing for DRR transactions

• Structured e-invoices based on Directive 2014/55/EU (Electronic invoicing in public procurement) will become mandatory for any DRR transaction (see list above). Other formats, including paper, may continue for other transactions e.g. domestic supplies.
• This will include a new definition of the EN16931 e-invoice standard.
• Such e-invoices must be issued by at least the 10th day after the chargeable event (2 days in the original proposal), and there must be no requirement for acceptance by the customer. In the case of payment on account, and e-invoice must be issued within 10 days of receipt of the payment. Self-billing has a deadline of 5 days after the supply. These requirement does not apply to any member states’ reporting regimes on domestic supplies.
• In a change to the original proposals, holding an e-invoice for eligible transactions will become a substantive condition to VAT deduction or reclaims.
• In a compromise proposed by France, taxpayers may engage with third-party e-invoicing service providers
•  E-invoices supplant paper invoices for legal purposes except in limited circumstances.
• The proposal to prohibit the use of summary invoices has been dropped under pressure from businesses. Instead, they may be used issued with the criteria:
  • that the VAT on the invoice is chargeable in the same month; and
  • the summary invoice must be issued by the 10th of the following month;
  • a fraud-sensitive supply and the member state has exercised its option to prohibit their use.

January 2035 Harmonisation of domestic and intra-community transaction reporting

• The proposal to require existing domestic e-invoice reporting regimes to harmonise to the EU standard has been changed to January 2035 (originally 2027). This separation from the main e-invoicing launch date of July 2030 reflects member states (e.g. Italy, France and Poland) concerns that tax authorities and taxpayers had invested extensively in the already launch/planned domestic regimes.

Tax Engine and VAT reporting with CTC

VAT Calc’s tax engine, ‘VAT Calculator’, has been developed with the EU’s VAT in the Digital Age reforms in full focus, including Continuous Transactions Controls agility to live calculate and report invoice data. And since VAT Calculator is built on the same single platform as our VAT Filer product, there is full reconciliation on VAT return reporting.

EU VAT in the Digital Age reforms