ViDA and other e-reporting and e-invoicing updates across the EU

This information is tailored to enhance the pragmatism of your e-invoicing implementation strategies across Europe as you prepare for 2024.

Germany

For an extended period, Germany has been a focal point of speculation regarding the implementation of mandatory B2B e-invoicing. Despite the release of the cabinet version of the draft legislation on August 29, 2023, Germany has yet to finalize its decision on the preferred CTC model for Digital Reporting Requirements (DRR). The country is currently awaiting further clarity from the VAT in the Digital Age (ViDA) proposal. Initially, the German mandate aims to reshape the e-invoicing landscape by regulating permissible e-invoice formats in the market and establishing rules governing buyer consent for receiving e-invoices.

On Friday, December 8, 2023, the informal working group established by the federal and state governments concluded its discussions on the contentious aspects of the Growth Opportunities Act without reaching a resolution. Consequently, the implementation of e-invoicing for domestic B2B transactions on January 1, 2025, remains undecided. Negotiations between the federal and state governments regarding the provisions of the Growth Opportunities Act are slated to resume at the beginning of the upcoming year.

France

The Senate had proposed the adoption of the reform to come into effect on 1 July 2025, however in order to allow for satisfactory preparation by businesses amendment CF522 was adopted on the December 13th to reinstate the proposed timeline:

1 September 2026 for large and mid-sized enterprises

1 September 2027 for small and medium sized enterprises.
*It is currently envisaged that entry into force may be deferred by a maximum of 3 months, if necessary.

It has been advised that the timeline will still be voted on this year and published in the 2024 Finance Act.

There has been speculation within the market that the 4 new invoice field requirements, would be incorporated in the invoicing requirements come 1 July 2024, implying businesses would need to facilitate/ acquire this information. We are of the opinion that those 4 new requirements were introduced in the CTC mandate to ensure the proper facilitation of e-invoicing, accordingly that those requirements would be introduced in line with the requirement to issue and receive e-invoices.

• Customer’s registration legal number (so-called SIREN number)
• Nature of the transaction (good / service / mixed)
• Option for payment of the VAT on an accrual basis
• Address of delivery of the goods if different from the client’s address

Romania

The Romanian Government recently released guidance providing information to taxpayers on the implementation of new e-invoicing and e-reporting regulations. It's noteworthy that this guidance was issued less than a month before the mandatory adoption of e-reporting by both established and non-established businesses registered for VAT in Romania. Beware that the guidance may not be entirely finalized, and businesses should stay vigilant for any updates as we note legislative changes will still be passed in the coming weeks.

The subsequent implications of the new legislation mean that, starting from April 2024, failure to comply with e-reporting requirements may result in fines ranging from 1,000 to 10,000 LEI, approximately EUR 200 to EUR 2,000."

Spain

On December 6th, 2023, the Royal Decree 1007/2023 of December 5th was officially published in the BOE (Spanish Official State Gazette). This decree has been enacted to approve the regulation outlining the specific requirements for computer or electronic systems and programs supporting the billing processes of entrepreneurs and professionals. Additionally, it establishes the standardization of formats for billing records, commonly referred to as "VeriFactu."

It is essential to note that this Regulation does not apply to entrepreneurs or professionals obligated to maintain VAT records through the Immediate Supply of Information (SII) when their turnover exceeds €6,010,121.04.

It's important to emphasize that the content covered by Royal Decree 1007/2023 is distinct from, albeit compatible with, the regulations governing electronic invoicing. Despite widespread speculation regarding the potential enforcement of B2B e-invoicing in Spain by 2025, the feasibility of such an implementation remains uncertain. Numerous aspects of the draft mandate lack clarity, and it is yet to be determined whether the speculated timeline will be achievable given the existing uncertainties in the implementation process.

ViDA

The ViDA proposals reform's focal point is the digital reporting requirements (DRR) initiative, aiming for a comprehensive EU-wide real-time tax data reporting framework. The original proposal involved a flagship reform mandating e-reporting for cross-border supplies on the basis of e-invoices by January 2028. Subsequent to the release of the proposal a year ago, challenges in harmonization arose due to differing choices made by early adopters of mandatory domestic e-invoicing. Some member states seek lower harmonization on domestic DRR regimes introduced post-ViDA. Validation options and the use of pre-clearance in e-invoicing have been discussed. Concerns have shifted the proposal away from harmonization, prompting GENA (formerly the European E-Invoicing Service Providers Association (EESPA) to call for agreement on fundamental DRR principles for an EU-wide real-time tax data reporting framework.

Certain components of the DRR proposals are expected to be revised, such as: like stricter invoicing requirements,

• the proposed abolition of summary invoices,
• the invoice content requirements and
• the timeframe for transmitting structured e-invoices to national tax portals for intra-EU trade (originally set at two days plus two days).

Implementation delays, applicable to the ViDA proposal as a whole, is currently envisaged, impacting the initially staged dates between 2024 and 2028.

• The commencement date for the common framework for domestic Digital Reporting Requirements (DRR) is uncertain, and
• There is skepticism regarding the feasibility of the initial 2028 date for intra-EU DRR. Accordingly, there is a possibility of a shift to January 1, 2030.

Subsequent to the Ecofin council meeting held in November, a progress report (ST 15877/23) on VAT in the Digital Age was released, outlining the Spanish Presidency's perspective on the current status and achievements in the second half of 2023, the outcome of which has been summarized above.

Although this segment of the proposal will necessitate further collaboration to harmonize Member States' positions, the draft compromise text deliberated during the Spanish Presidency stands as a potential starting point for continued work in the Council under the Belgian Presidency in the first half of 2024.

Finally

As we bid farewell to 2023, the landscape of Continuous Transaction Controls (CTC) mandates has witnessed significant developments across Germany, France, Romania, Spain, as well as Poland and Belgium (not mentioned in this alert)v alongside notable progress within the framework of ViDA. The German B2B e-invoicing scenario remains in a state of anticipation, pending resolution on the Growth Opportunities Act, while France has adjusted its reform timeline for enterprise adoption. Romania is navigating through the finalization of its e-invoicing and e-reporting regulations, signaling a critical period for businesses up until the first quarter of next year. Meanwhile, Spain's Royal Decree 1007/2023 introduces specific regulations for billing processes, presenting both compatibility and uncertainties in the timeline for B2B e-invoicing. On the ViDA front, the Spanish Presidency's progress report reveals ongoing efforts and potential breakthroughs in the Digital Reporting Requirements and e-invoicing domains. As we step into the upcoming year, Romania, in conjunction with Poland, will play a crucial role in determining the necessity of granting businesses an extensive timeframe for implementing CTC. It's worth noting that the dynamic evolution of CTC mandates both within the EU and on a global scale underscores the ongoing need for businesses to remain vigilant, adaptable, and responsive in navigating these regulatory environments.