The VAT in the Digital Age (ViDA) package, adopted by the EU on 11 March 2025, is a decisive step in modernizing the EU VAT framework. Its goals are to simplify compliance, reduce fraud and align VAT reporting with the realities of the digital economy. Of ViDA’s three pillars, mandatory electronic invoicing and enhanced digital reporting will have the largest operational impact on businesses, in Luxembourg and abroad.
Overview of the ViDA changes for electronic invoicing
While the rules distinguish between cases where e-invoicing will be mandatory and where it remains optional or subject to national discretion, by 1 July 2030 intra-EU B2B transactions will become subject to mandatory electronic invoicing. Electronic invoices will have to comply with the European standard EN 16931 which defines a common semantic data model for the core elements of an e-invoice, ensuring interoperability across all EU Member States.
EU Member States retain the discretion to decide whether and when to make e-invoicing mandatory for
- Domestic B2B transactions
- B2C transactions
If adopted, electronic invoices will need to comply with the European standard.
Public sector (B2G) transactions remain governed by Directive 2014/55/EU, which already requires the use of structured e-invoices for public procurement. ViDA does not modify existing national rules for invoicing to public bodies. In Luxembourg, all suppliers issuing invoices to public bodies have had to issue them in structured electronic form via PEPPOL (Pan-European Public Procurement Online) since 18 March 2023.
Although the EU-wide ViDA e-invoicing obligation will only apply from 1 July 2030, that date will come quickly. Amongst other Member States, Luxembourg’s neighbors are already moving ahead with national e-invoicing and e-reporting systems:
- France will roll out mandatory B2B e-invoicing and e-reporting from 1 September 2026, with a phased implementation by company size.
- Belgium has set 1 January 2026 as the start date for mandatory B2B e-invoicing, with e-reporting measures to follow. Belgium has adopted PEPPOL as the national standard infrastructure for electronic invoicing.
- Germany has required the capability to receive structured e-invoices since the beginning of the year, with a gradual extension to issuing obligations by 1 January 2028.
While not a direct neighbor, Ireland published a phased ViDA‑aligned roadmap in October that aims for full implementation during 2028–2030.
For a complete overview of the current e-invoicing implementation timeline across the EU as of the day of this publication, please see below.
Situation in Luxembourg
Today, electronic invoicing is only mandatory for B2G transactions. For business-to-business (B2B) and business-to-consumer (B2C) transactions, electronic invoicing remains optional and subject to agreement between the parties.
To meet the EU-wide deadline of 1 July 2030, Luxembourg should accelerate preparation of national implementing legislation and will have to make some crucial policy choices:
- Whether to include domestic B2B and/or B2C transactions in the national mandate
- Which transmission platform to adopt (PEPPOL vs. a national hub vs. hybrid)
- Whether to implement a single nationwide rollout or a phased approach (by company size, sector, volume of incoming/issued invoices)
- The statutory implementation date and transitional rules.
Our expectations, based on the launch of electronic invoices for B2G transactions and current implementations in neighboring countries, would be:
- Timing: We expect national implementing legislation to be adopted in 2026, with a Luxembourg implementation window in mid‑2028 to early‑2029 at the latest. This allows time to resolve initial issues and prepare Luxembourg taxable persons before the EU‑wide mandate on 1 July 2030.
- Transmission platform: PEPPOL is the most likely choice. Luxembourg already uses PEPPOL for B2G invoicing and PEPPOL supports cross‑border interoperability — a core ViDA objective.
- Implementation approach: While a phased approach can help SMEs, multiple co‑existing mechanisms increase ecosystem complexity and operational burdens. Given Luxembourg’s market size and the need for simplicity, a single national implementation including domestic B2B transactions is the most practical outcome.
Start preparing now
Whether or not the national rules follow our predictions, electronic invoicing will be a reality tomorrow. Domestic companies that trade with partners in other EU jurisdictions should begin planning now to ensure full compliance of their invoicing systems and data processes by 1July 2030.
To prepare for these upcoming changes, businesses should monitor and assess the impact of e-invoicing regulations on their systems and business processes. Defining a strategy and roadmap to be ready to meet these new obligations at the latest by 1July 2030 (but very likely 18 to 24 months before) should be on the to-do list of tax and finance functions, with the support of IT.
KPMG Luxembourg has the combined VAT and technology expertise to help you prepare an e-invoicing roadmap and implementation plan. Do get in touch if there is anything you would like to discuss.
