Finalization of European Commission Proposals for E-invoicing and Digital Reporting Likely To Be Delayed Until 2024.

The VAT Expert Group of the European Commission (VAT Expert Group) held a meeting on 26 October 2023. Its agenda included a “VAT in the digital age” (ViDA) proposal, a legislative package to modify the VAT Directive which affects e-invoicing and digital reporting requirements.

The existing legislative package, proposed in December 2022 for the purposes of modernizing the VAT system and consequently narrowing down the opportunities for abuse, consists of three main parts:

  • E-invoicing and Digital Reporting Requirements — a modification to e-invoicing rules, as well as standardizing digital reporting obligations.
  • Platform Economy — VAT rules for online markets platforms.
  • Single VAT registration — minimizing the obligation of VAT registration that arises in Member States by expanding the scope of the One Stop Shop scheme to more types of transactions, and harmonizing non-resident reverse-charge rules.

Some of the rules concerning e-invoicing would have entered into force by January 2024. According to the proposal, e-invoicing would not be tied to the consent of the parties involved, thus all businesses would be obliged to receive suppliers’ e-invoices. In addition, suppliers would have to issue e-invoices in a structured data format incompatible with the existing PDF format.

Furthermore, electronic invoicing obligations could be introduced at a national level without prior European Commission permission.

The VAT Expert Group has made suggestions concerning the proposed legislative package and its roll out date. Accordingly, it is likely that the finalization of the proposal will be delayed until 2024 and thus tits introduction date will be postponed from 1 January 2024.

EU Finance Ministers will vote on the suggestions of the VAT Expert Group at the 8 December ECOFIN meeting.

If you have any questions regarding the expected impact of the legislative package, feel free to contact us.

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