E-Invoicing & Digital Reporting in the EU: Upcoming Changes
E-invoicing and digital reporting regulations are popular among the tax authorities as it helps them to have better visibility over transactions in their economy, thereby empowering them to enforce tax controls more efficiently.
On the other end of the spectrum, taxpayers are challenged by demanding compliance requirements. This challenge is particularly pronounced for international companies that must monitor and adapt to ever-changing rules and regulations in multiple jurisdictions to stay compliant.
In this blog, we would like to summarise all regulatory changes expected in the EU to help you stay updated with e-invoicing and digital reporting obligations. For existing e-invoicing rules and details, you can check out our country tax guides.
France has decided to postpone the implementation of the e-invoicing and e-reporting reform, which was initially planned to commence on July 1, 2024. The revised timeline for the rollout will be determined during the discussions for the Finance Law for 2024.
France is introducing an e-invoicing and e-reporting system. Even though there is a phased approach that will require different taxpayer groups to issue e-invoices at different deadlines, all taxpayers must be able to receive e-invoices from the beginning of the roll-out date. This means the Accounts Payable process must be ready to process electronic invoices for all taxpayers established in France starting from a deadline that will be established later during the discussions for the Finance law.
The previously announced timelines were as follows:
- All companies must be able to receive electronic invoices from July 1, 2024.
- Large enterprises must comply from July 1, 2024.
- Intermediate-sized enterprise (ISE) companies must comply from January 1, 2025.
- Micro-enterprises must comply from January 1, 2026.
Poland has been experimenting with e-invoicing through its KSEF platform, which went live with a voluntary phase in January 2022. As a part of this experiment, Poland has recently updated its e-invoicing schema FA(2).
From July 1, 2024, e-invoicing will be mandatory for all VAT-registered Polish entities and Polish branches of foreign entities concerning their B2B transactions.
Romania has a live e-invoicing system currently mandatory for B2G and certain B2B transactions. B2B transactions that are currently in the scope of e-invoicing are the supply of high fiscal risk products. Businesses supplying high fiscal risk products must issue their invoices electronically in B2B cases.
In line with its goal to introduce a full B2B mandate, Romania has applied to the EU Commission to receive permission to enforce the e-invoicing mandate from 2024. Recently, the Commission published a proposal to authorise Romania to introduce a country-wide B2B mandate starting from January 1, 2024, and the European Council has approved it through its decision. Romania will publish details about the implementation as a next step.
Even though the January deadline is a few months away, considering all preparations being completed by the Romanian government, the mandate is expected to go live on time.
Additionally, SAF-T obligation went live on July 1, 2023 for medium size companies in Romania. The remaining taxpayers (small size taxpayers and non-residents) are obliged to comply with SAF-T from July 1, 2025.
The Spanish digital reporting system Suministro Inmediato de Información (SII) requiring invoice data to be reported to the tax authority is live.
The Spanish government passed the "Create and Grow" law introducing e-invoicing obligations for B2B transactions. The timeline to comply with the upcoming e-invoicing system is still not determined as it depends on the date of implementing regulations. The draft implementing regulations was recently published. Therefore, implementing regulations will soon be finalized and approved. Upon its approval, the timelines and scope of e-invoicing will be as follows:
- Companies with an annual turnover exceeding €8m: one year after the date of the approval of the implementing regulation
- All other companies and professionals: two years after the date of the approval of the implementing regulation
Germany does not have an e-invoicing or digital reporting obligation in place for B2B transactions. However, the government is planning to implement an e-invoicing and digital reporting system for domestic transactions from January 1, 2026. Therefore, Germany applied for approval from the EU Commission to introduce an e-invoicing mandate. Recently, the Commission issued a proposal allowing Germany to proceed with its plans and the European Council has approved it through its decision. The upcoming German e-invoicing and digital reporting system is expected to align with the ViDa proposal.
Even though no major changes are expected in the Portuguese real-time reporting and SAF-T obligations, rules relating to ensuring the integrity and authenticity of electronic documents (including invoices and other fiscally relevant documents) will change from January 1, 2024.
Taxpayers must guarantee the integrity and authenticity of electronic documents through the following means from January 1, 2024:
- Affixing a qualified electronic signature under the legal terms
- Affixing a qualified electronic seal
- Use of an electronic data exchange system provided that the respective issuers and recipients sign an agreement that follows the legal conditions of the «European EDI type agreement.»
Additionally, mandatory e-invoicing for SMEs for B2G transactions is postponed to January 1, 2024.
The Italian e-invoicing system through SDI will be mandatory for SMEs from January 1, 2024. This change will impact SMEs and some marketplaces as their underlying suppliers will be in the scope of e-invoicing.
The Belgian authorities published a proposal to prescribe a B2B e-invoicing mandate. According to the proposal, the timelines and roll-out plan will be as follows:
- Taxpayers with an annual turnover above EUR 9 million from July 2024,
- Taxpayers with an annual turnover above EUR 700.000 from January 2025,
- The rest of the taxpayers from July 2025.
The Croatian tax authority announced its plan to introduce an upgraded version of the Fiscalization system called Fiscalization 2.0.
According to the announcement, the goal of the Fiscalization 2.0 project is to establish a system for the fiscalization of invoices issued in the economy (B2B) by implementing a cashless payment system via e-Invoice with an integrated e-archive. The system is expected to go live by the end of 2024. More details are expected to be published by the tax authority over the next few months.
E-accounting obligation “MyData” that requires real-time submission of accounting ledger entries is live. There is no e-invoicing obligation announcement to date for B2B transactions. However, B2G e-invoicing roll-out has been officially announced. According to the roll-out plan, the timelines are as follows:
- From January 1, 2024, suppliers to all central government agencies will be in scope.
- From June 1, 2024 suppliers to all other government authorities will be in scope.
- From January 1, 2025, the rest of the supplies to the government must be invoiced electronically.
VAT in the Digital Age proposal suggests groundbreaking changes concerning e-invoicing and digital reporting obligations for businesses operating in the EU. You can check out our blog post explaining the proposed changes in detail.
Even though ViDa suggests e-invoicing and digital reporting obligations for cross border B2B supplies for all member states by latest 2028, the impact of the proposal has already been witnessed, with some European countries announcing their intentions to implement e-invoicing requirements (e.g., Sweden), while others accelerate their plans through timely legislative efforts(e.g. Germany). Most countries that will introduce e-invoicing and/or digital reporting systems aim to introduce rules that align with the ViDa proposal for domestic transactions.
ViDa's implementation within the EU is anticipated to spark a domino effect globally, catalysing the pace of adoption for advanced e-invoicing systems.
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