Apart from replacing the recapitulative statements with a new digital reporting system for intra-Community transactions, the initiative aims to achieve the harmonization of the existing and future reporting systems for supplies of goods and services for consideration carried out within the territory of the Member State, in order to avoid the administrative burden which this fragmented framework entails for taxable persons operating cross-border. These systems will align with the digital reporting system designed for intra-Community transactions, simplifying compliance to taxpayers, which will be able to provide with a common format the data required for both domestic and intra-Community transactions, in any Member State.
This harmonisation is achieved by the rules included in the new Section 2 of Chapter 6 of Title XI.
The first paragraph of Article 271a allows Member States to put in place a reporting system for supplies of goods and services carried out between taxable persons within their territory.
The second paragraph of Article 271a allows Member States to put in place reporting systems for any other type of transaction. This second paragraph covers for instance, the reporting of supplies of goods or services carried out by a taxable person to a private individual.
To be noted that Article 271a constitutes an option, but not an obligation for Member States. However, if they decide to put in place a reporting system according to the first paragraph of that Article, that is to say a reporting system for transactions between taxable persons within the territory of their Member State, such a system will have to comply with the features laid down in Article 271b.
The features of the reporting system in Article 271b are similar to the one designed for intraCommunity transactions: reporting on a transaction-by-transaction basis, transmission of the data two working days after the issuance of the invoice, or after the date the invoice should have been issued where the taxable person has not complied with their obligation to issue an invoice, the possibility of transmitting the data directly by the taxable person or through a service provider, and the possibility to transmit the data according to the European Standard. Member States can put at the disposal of taxable persons additional tools to transmit the data. The objective is, once again, to provide enough flexibility to Member States and taxable persons to use different methods for the transmission of the data, while providing for at least one standard which will be accepted by all Member States and therefore allowing companies to submit their data according to the European Standard in any Member State, without needing to adapt to different reporting systems.
It will be necessary to verify if the reform of reporting system achieves its objectives of reducing the VAT gap and reducing the costs for taxable persons derived from the fragmentation of those systems. For that reason, Article 271c asks the Commission to submit by March 2033 a report evaluating the results achieved by this reform and, if necessary, a proposal to overcome the limitations and proposing a further harmonisation of domestic reporting. This deadline will allow to evaluate the reporting systems once they are fully implemented, account taken that the full adaptation to the harmonised requirements does not need to take place until 2028.
To achieve the harmonisation of reporting systems it is not enough that the future systems are implemented according to the features laid down in this initiative. Member States which already have reporting systems in place for these transactions will have to adapt them to the features of the harmonised reporting system. For that purpose, the initiative requires that this adaptation takes place by 2028 at the latest.
Article 273 continues to give Member States freedom to implement these obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion. However, this freedom is limited in relation to reporting obligations, which can only be implemented according to the provisions of Chapter 6 of Title XI, in relation to the transactions under their scope.
Source EU ViDA (VAT in the Digital Age) – Proposed Changes to the EU VAT Directive 2006/112/EC
New version of the articles 271a – 273 af of January 1, 2028
Chapter 6: Digital reporting requirements
Section 2
Digital reporting requirements for supplies of goods and services for consideration made between taxable persons within the territory of a Member State
Article 271a
- Member States may require that taxable persons identified for VAT purposes in their territory send electronically to their tax authorities data on the supplies of goods and services made for consideration to other taxable persons within their territory.
- Member States may require that taxable persons identified for VAT purposes in their territory send electronically to their tax authorities data on taxable transactions other than those referred to in paragraph 1 of this Article and in Article 262.
Article 271b
Where a Member State requires to send the data pursuant to Article 271a, the taxable person, or a third party on behalf of the taxable person, shall transmit that data on a transaction-by-transaction basis by no later than 2 working days after the invoice is issued, or after the date the invoice had to be issued where the taxable person does not comply with the obligation to issue an invoice. Member States shall allow for the transmission of data from electronic invoices which comply with the European standard on electronic invoicing and the list of its syntaxes pursuant to Directive 2014/55/EU.
Member States may allow for the transmission of the data from electronic invoices using other data formats.
Article 271c
By 31 March 2033 at the latest the Commission shall, based on the information provided by Member States, present to the Council a report on the functioning of the domestic reporting requirements set out in this Section. In that report, the Commission shall assess the need for further harmonisation measures and shall if deemed necessary, make an appropriate proposal for such measures.
CHAPTER 7
Miscellaneous provisions
Article 272
- Member States may release the following taxable persons from certain or all obligations referred to in Chapters 2 to 6:
(a) taxable persons whose intra-Community acquisitions of goods are not subject to VAT pursuant to Article 3(1);
(b) taxable persons carrying out none of the transactions referred to in Articles 20, 21, 22, 33, 36, 136a, 138 and 141;
(c) taxable persons carrying out only supplies of goods or of services which are exempt pursuant to Articles 132, 135 and 136, Articles 146 to 149 and Articles 151, 152 or 153;
(d) taxable persons covered by the exemption for small enterprises provided for in Articles 282 to 292;
(e) taxable persons covered by the common flat-rate scheme for farmers.
Member States may not release the taxable persons referred to in point (b) of the first subparagraph from the invoicing obligations laid down in Sections 3 to 6 of Chapter 3 and Section 3 of Chapter 4.
- If Member States exercise the option under point (e) of the first subparagraph of paragraph 1, they shall take the measures necessary to ensure the correct application of the transitional arrangements for the taxation of intra-Community transactions.
- Member States may release taxable persons other than those referred to in paragraph 1 from certain of the accounting obligations referred to in Article 242.
Article 273
Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of borders.
The option under the first paragraph may not be relied upon in order to impose additional invoicing obligations over and above those laid down in Chapter 3, nor to implement additional reporting obligations -over and above those laid down in Title XI, Chapter 6.
See also
- ViDA Analyzed – Part 1: E-invoicing will be the general rule for the issuance of invoices – Legal basis
- ViDA Analyzed – Part 2: 2 days deadline for the issuance of invoices on intra-Community supplies
- ViDA Analyzed – Part 3: Elimination of the possibility to issue summary invoices
- ViDA Analyzed – Part 4: Content of invoice – More data elements added to allow automation of process reporting (Art. 226)
- ViDA Analyzed – Part 5: Call-Off Simplification (Art. 17a) introduced via the Quick Fixes will cease to exist
- ViDA Analyzed – Part 6: Digital reporting system for intra-Community transactions: Articles 262 to 271
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