Worldwide updates on E-Invoicing/Real Time Reporting/SAF-T in November 2024

The Overviews

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Highlights

On November 5, 2024, the ministers of the Finance of the Member States will vote during the ECOFIN meeting on the VAT in the Digital Age proposal

ViDA – Updated Draft Council Directive amending Directive 2006/112/EC as regards VAT rules for the digital age
ViDA – Changes to the EU VAT Directive 2006/112 – Old vs. New articles

ECOFIN Approval: The Economic and Financial Affairs Council (ECOFIN) has approved the VAT in the Digital Age (ViDA) Act, aimed at modernizing and streamlining VAT systems across the EU to address challenges from the digital economy and cross-border e-commerce.
Key Provisions: The ViDA Act includes mandatory Digital Reporting Requirements (DRR) for businesses, targeting structured e-invoices for B2B transactions starting July 1, 2030, reforms for the platform economy, and the introduction of a Single VAT Registration system to ease compliance for e-commerce businesses.
E-Invoicing and Central Database: The Act emphasizes harmonizing e-invoicing standards, with a new deadline of January 2035 for alignment, and establishes a Central VIES database to enhance transparency and combat VAT fraud by tracking intra-EU transactions.
Compromise and Flexibility: The approval reflects a compromise among EU Member States, balancing reform urgency with practical implementation, including optional exemptions for small businesses and suppliers with a VAT ID to minimize compliance burdens.
Future Steps: Following the ECOFIN approval, the ViDA Act will be submitted to the European Parliament for formal approval and is expected to be adopted by the Council in early 2025. Businesses are encouraged to prepare for the upcoming changes, particularly the mandatory DRR set for July 2030, as the EU aims to create a fair and efficient VAT environment in the digital age.

Spain – Technical Specifications Published for the SIF/VERI*FACTU Initiative
United Arab Emirates – UAE’s 2026 B2B and B2G e-Invoicing Mandate: Understanding the Decentralized 5-Corner Model
Latvian Parliament Approves E-Invoicing Law: B2G as of 2025, B2B as of 2026
- Mandatory e-Invoicing Law Passed: The Latvian Parliament has approved a law mandating e-invoicing for businesses, set to take effect in 2025, with the aim of modernizing financial transactions.
- Implementation Timeline: The e-invoicing requirements will be implemented in two phases: Business-to-Government (B2G) transactions will start in 2025, followed by Business-to-Business (B2B) transactions beginning in 2026.
Poland – Final Consultations on Mandatory National e-Invoice System (KSeF)
- KSeF Implementation Timeline: Poland’s National e-Invoicing System (KSeF) is set to be mandatory starting February 2026, with a draft law currently under final consultations by the Polish government to facilitate the rollout and address taxpayer concerns.
- Draft Law and Schema Release: The Polish Ministry of Finance has published the assumptions for the VAT draft law concerning KSeF, including the FA_VAT schema, aimed at providing legal solutions for the mandatory implementation of the e-invoicing system.
- Phased Implementation and Support: The KSeF amendment includes a phased approach to e-invoicing implementation, allowing for an offline mode until 2026, while also outlining key business solutions to ensure a seamless transition for Polish entrepreneurs and compliance with future European harmonization of e-invoices expected by 2035.
Australia – New Zealand: Peppol PINT invoice format becomes the default for B2G in A-NZ
- Australia and New Zealand have adopted a policy encouraging e-invoicing with incentives like faster payment terms from public entities, but it is not yet mandatory.
- Both countries use the Peppol network as the primary medium for e-invoicing, making most public administrations accessible through this network.
- The PINT (Peppol INTernational) invoice format, an extension of Peppol BIS 3.0 designed for local specifics, will become the default for B2G e-invoicing transactions starting November 15, 2025.
- Specifications for the Peppol PINT A-NZ invoice format, developed specifically for Australia and New Zealand, are available online.
- The PINT A-NZ invoice format will become mandatory for all B2G e-invoicing transactions on May 15, 2025, with the Peppol BIS 3.0 format remaining optional until then.
Bosnia and Herzegovina Mandates E-Invoicing and Reporting for Online Transactions
- Bosnia and Herzegovina government plans to introduce mandatory electronic invoicing and reporting
- Aim is to combat tax fraud, particularly in online sales and digital platforms
Impact of Brazil’s Tax Reform on Electronic Invoicing: A Simplified and Modernized Approach
- Brazil enacted tax reform under Constitutional Amendment 132 on 11.11.2024
- The reform aims to simplify and modernize Brazil’s complex tax system
- Five existing taxes (PIS, Cofins, IPI, ICMS, and ISS) have been consolidated into two new taxes
- The new taxes are the Goods and Services Tax (IBS) managed by states and municipalities, and the Contribution on Goods and Services (CBS) administered at the federal level
Portugal – Acceptance of PDF Invoices for VAT Deduction Until 2025
- Acceptance of PDF Invoices: Until December 31, 2024, invoices in PDF format are accepted and considered electronic invoices for all fiscal purposes, as per Article 284 of the State Budget Law for 2024.
- Extension Proposal: The proposal for the State Budget Law for 2025 includes a similar provision extending the acceptance of PDF invoices until December 31, 2025.
- Regulatory Framework: The document outlines the need to align these provisions with the VAT Code, specifying criteria for accepting PDF invoices and differentiating them from electronic invoices.
- Electronic Invoices Definition: According to Decree-Law No. 28/2019, an electronic invoice is one that is issued and received in electronic format and must be accepted by the recipient.
- Validity of PDF Invoices: Invoices generated by certified billing software in PDF format and delivered to the buyer are valid for exercising the right to deduct VAT, as per Article 19 of the VAT Code.
Bosnia and Herzegovina Prepares for Mandatory e-Invoicing: Proposed Bill for 2025
- Introduction of Mandatory E-Invoicing: Bosnia and Herzegovina is drafting a bill to introduce mandatory electronic invoicing, expected to be presented to parliament in early 2025. This legislation aims to establish live reporting requirements to government tax authorities, targeting tax fraud in e-commerce and digital platforms.
- Objectives to Combat Tax Fraud: The primary goal of this mandate is to increase tax transparency, ensure real-time oversight of transactions, and align with international e-Invoicing standards, thereby addressing widespread invoice fraud in online and digital commerce.
- Anticipated Structure and Scope: The new system is expected to follow the EU e-Invoicing directive, starting with B2G (Business-to-Government) public procurement and eventually expanding to B2B (Business-to-Business) transactions, ensuring alignment with regional and international practices.
- Impact on Businesses: Businesses will need to transition to digital systems, invest in e-Invoicing software that meets new standards, and ensure their systems can facilitate real-time reporting to tax authorities. Familiarizing themselves with EU e-Invoicing directives will be crucial for compliance.
- Government’s Commitment to Compliance: The government’s commitment to fostering greater tax compliance and transparency is evident through this initiative. By aligning its e-Invoicing framework with EU standards and expanding its scope, Bosnia and Herzegovina aims to create a more efficient and fraud-resistant tax ecosystem, encouraging businesses to stay informed and prepared for upcoming changes.
Denmark – Greenland: E-invoicing for public entities in Greenland will come into effect in 2025
- Mandatory E-invoicing for Public Sector: Starting from 1 March 2025, the Government of Greenland mandates that all legal and natural persons must send digital invoices when delivering goods or services to public authorities, defining digital invoices as those that can be processed automatically and digitally.
- Registration and Information Requirements: Public authorities must be registered in the joint public NemHandelsRegister and include specific details such as CVR number, GLN number, reference person, order/requisition number, and account string in contracts, orders, or requisitions.
- Exemptions and Compliance: Entities below a certain annual turnover, yet to be determined by the municipal board, will be exempt from this e-invoicing requirement. Non-compliant electronic invoices that cannot be processed digitally will be rejected.
Germany: FAQ: Mandatory E-Invoice Implementation from January 1, 2025 – Answers to Common Questions
- Mandatory E-Invoicing Introduction: From January 1, 2025, electronic invoicing (e-invoicing) will be mandatory for sales between domestic entrepreneurs in Germany, excluding transactions with private end consumers.
- Definition and Compliance: E-invoices must be issued, transmitted, and received in a structured electronic format enabling electronic processing. Simple PDFs and paper invoices will not meet this requirement after the deadline.
- Transitional Regulations: Until December 31, 2026, businesses can still issue non-e-invoices, such as paper invoices, with recipient consent. For businesses with annual turnover up to EUR 800,000, the deadline extends to the end of 2027.
- Exceptions and Requirements: Certain transactions, like those to end consumers or small amounts, are exempt from mandatory e-invoicing. However, all domestic companies must be able to receive e-invoices starting January 1, 2025.
- Storage and Submission: E-invoices must be stored in an unchangeable format for eight years. From January 1, 2025, taxpayers can submit electronic invoices to tax authorities via ELSTER upon request.
Latvia mandates e-invoicing with amendments to the Accounting Law published
- From 1 January 2025, resident business and budget entities in Latvia must send e-invoices for contracts signed from this date, with B2G e-invoicing mandatory for resident companies and budget entities.
- A transition period allows submitting e-invoices for B2G contracts signed by 31 December 2024 until 1 January 2026, when B2B e-invoicing and invoice data reporting to the State Revenue Service (SRS) become mandatory.
- Rules for B2B e-invoices and reporting will be announced in May 2025, and e-invoices must comply with EU standards LVS EN 16931-1:2017 and LVS CEN/TS 16931-2:2017.
Slovakia’s New Electronic Transaction Control Statement for VAT Reporting: A Step Towards Mandatory E-Invoicing
- Electronic Transaction Control Statement: Slovakia introduced an electronic transaction control statement report from January 1, 2024, required in support of the VAT return and applicable to both resident and non-resident businesses, filled monthly or quarterly based on the reporting cycle.
- Future E-Invoicing Plans: Currently, the control statement is uploaded via the government portal, but there are plans to launch mandatory e-invoicing to replace it. VATCalc’s VAT Filer product can produce these control statements, ensuring compliance with Slovakian and EU VAT laws.
Ukrainian Ministry of Finance Implements New SAF-T UA 2.0 for Transactional Level Reporting
- Mandatory SAF-T UA Submission: Since August 27, 2021, large taxpayers in Ukraine must submit Standard Audit Tax Files (SAF-T UA) within two business days when requested during audits. This requirement became mandatory for all large taxpayers on January 1, 2025, and will extend to all VAT payers by January 1, 2027.
- Preparation for Implementation: The Ukrainian State Tax Service (STS) is upgrading its electronic systems and advising large taxpayers to ensure they are prepared for prompt audit responses. Order No. 561 specifies that SAF-T UA submissions must include detailed data such as accounting records, tax details, and supporting source documents.
- Addressing Implementation Challenges: To tackle technical challenges, a collaborative meeting was held involving the State Tax Service, Ministry of Finance, National Bank, banking associations, and IT companies. The meeting focused on converting banking data into SAF-T UA format, with tax service experts emphasizing the importance of ongoing collaboration and test runs.
- Key Steps for Taxpayers: Taxpayers must ensure their software systems can handle SAF-T UA requirements, maintain precise records, and meet strict submission deadlines. Proper preparation is essential to achieve compliance and avoid penalties as the implementation deadlines approach.
- Further Information: For more details on e-invoicing and upcoming regulations in Ukraine, additional resources are available to help businesses stay informed and compliant.
Viva la ViDA! What does VAT in the Digital Age mean for business and Member States? (Maria Elena Scoppio)
- ViDA Overview: VAT in the Digital Age (ViDA) is a significant reform package proposed by the European Commission to modernize the EU’s VAT systems, aiming to streamline processes, reduce administrative burdens, and combat tax fraud, particularly in the growing digital economy.
- Key Benefits: ViDA introduces Digital Reporting Requirements (DRRs) for real-time reporting of cross-border transactions, enhancing fraud prevention and simplifying compliance for businesses, especially small and medium-sized enterprises (SMEs) by allowing a Single VAT Registration (SVR) across EU Member States.
- Support for Businesses: The Commission plans to assist businesses in adapting to ViDA by mandating electronic invoicing for cross-border transactions by July 2030, offering seminars and working groups for stakeholder engagement, and ensuring a uniform reporting format across the EU.
- Positive Reception: ViDA has been well-received by EU Member States and businesses, with expectations of reducing VAT fraud by €11 billion annually and decreasing compliance costs by €4.1 billion, while also ensuring platform providers in the sharing economy collect and remit VAT.
- Next Steps: The proposal is set for adoption by EU Finance Ministers after further consultation with the European Parliament, with ongoing efforts focused on developing secondary legislation and technical frameworks to support the implementation of ViDA.
China – National rollout of fully digitalized e-fapiao set on 1 December 2024
- Nationwide Rollout of e-Fapiao: The State Taxation Administration STA) in China will implement fully digitalized e-fapiao invoices across the country starting December 1, 2024, allowing all taxpayers to issue e-fapiao, not just selected or newly registered ones.
- Promotion for Civil Aviation: Alongside the nationwide rollout, the STA will also promote e-fapiao for civil aviation passenger transport services, enabling companies in the air transport sector to issue digital invoices for domestic transport services from the same date.
- Legal Equivalence and Support: E-fapiao will be legally equivalent to traditional paper invoices, and the STA will provide a nationwide platform for e-invoice services to facilitate smooth issuance and management for taxpayers.
Denmark announces upcoming changes to its e-invoicing format
- Announcement of OIOUBL 3: Denmark has announced a new version of its e-invoicing format, OIOUBL 3, with a release candidate presented by Nemhandel on November 21, 2024, which includes mandatory invoice message responses and aligns with the European e-invoicing standard (EN 16931).
- Key Components of the Package: The OIOUBL 3 Invoice Package features a Business Interoperability Specification (BIS) for invoices, credit notes, and responses, along with migration plans detailing interactions with existing formats and specific field definitions for various document types.
- Major Changes: Significant updates in OIOUBL 3 include the separation of message level and business level responses, the requirement for institutional end users to receive invoice responses at a registered endpoint, and adjustments to field definitions and calculations to ensure compliance with EN 16931.
- Actions for Senders and Receivers: Invoice senders must register as suppliers in the Nemhandelsregistret (NHR) with mandatory OIOUBL 3 document profiles, while receivers should register as customers with both OIOUBL 2.1 and OIOUBL 3 profiles to facilitate a smooth transition during the migration period.
- Migration Timeline: The Danish Business Authority has set a detailed migration plan, with key dates including the final release of OIOUBL 3 on April 10, 2025, voluntary support until May 15, 2025, mandatory support starting November 15, 2025, and the discontinuation of OIOUBL 2.1 support by May 15, 2026.
German B2B mandate adds exceptions and “simplifications”
- Permanent Exemption for Small Businesses: A new law exempts small business owners from the B2B mandate to issue electronic invoices, although they must still receive electronic invoices.
- Simplification vs. Complexity: While the exemption seems beneficial for small businesses, it may lead to increased complexity in invoice handling for their buyers, who must manage both structured and non-structured invoices.
- Reduced Archiving Period: The archiving period for invoices is reduced from 10 to 8 years, aimed at easing the burden on small businesses in maintaining records.
- Practical Storage Challenges: Despite the reduced archiving period, many businesses may find it simpler to continue storing all documents for 10 years due to existing requirements for other documents.
- Mixed Impact on SMEs: While the initiatives are well-intended to support over 3.5 million SMEs in Germany, they may not effectively simplify processes and could inadvertently complicate compliance and record-keeping efforts.
Implementation of Digital Consignment Notes Delayed Until Early 2025
- The Ministry of National Economy and Finance and AADE announced the upcoming implementation of a digital consignment note application on the myDATA platform, aimed at real-time monitoring of goods movement, starting early next year.
- Phase A will have two periods: for businesses with over €200,000 turnover and specific sectors, optional digital transmission is until March 31, 2025, becoming mandatory from April 1, 2025; for other businesses, optional until September 30, 2025, and mandatory from October 1, 2025.
- Phase B will allow all businesses to optionally transmit data from May 1 to September 30, 2025, with mandatory transmission starting October 1, 2025, alongside new exceptions for digital movement document issuance.
- The initiative is designed to simplify compliance procedures and combat tax evasion, incorporating modern digital tools for transaction document issuance.
- Penalties for non-compliance with the new framework will increase significantly, with fines of €5,000 for businesses maintaining a simplified accounting system and €10,000 for those using a double-entry system.