On 8 December the European Commission (“EC”) launched its long-awaited proposals to modernize the VAT rules within the EU collectively known as “VAT in the Digital Age package” (“ViDA”). Note that is still a PROPOSAL subject to change.
ViDA has 3 pillars:
- Digital Reporting Requirements (DRR)
- Platform Economy
- Single EU VAT Registration
E-invoicing will be the general rule for the issuance of invoices: Articles 217, 218 and 232
The proposal changes this situation, providing in Article 218 that electronic invoicing will be the default system for the issuance of invoices. The use of paper invoices will only be possible in situations where Member States authorise them. This authorisation cannot cover those cases that are subject to the reporting obligations in Chapter 6 of Title XI, as that would prevent or create difficulties for the automatic reporting of the data. Taxable persons will always be allowed to issue electronic invoices according to the European standard. This standard is the one adopted by the Commission Implementing Decision (EU) 2017/1870 according to the request laid down in Directive 2014/55/EU. The issuance and transmission of electronic invoices cannot be conditional on a prior authorisation of validation by the tax authorities of the Member State in order to be sent to the recipient. Several Member States have been granted a special measure to apply mandatory e-invoicing, where such clearance systems have been implemented. These systems can only be applied by those Member States up to 1 January 2028, ensuring the convergence with the EU digital reporting system.
Article 218 – VERSION APPLICABLE BETWEEN Jan 1, 2024 and Jan 1, 2028
- For the purposes of this Directive, Member State shall accept documents or messages on paper or in electronic form as invoices if they meet the conditions laid down in this Chapter.
- Member States may impose the obligation to issue electronic invoices. Member States imposing this obligation shall allow for the issuance of electronic invoices which comply with the European standard on electronic invoicing and the list of its syntaxes pursuant to Directive 2014/55/EU of the European Parliament and of the Council. The issuance of electronic invoices by taxable persons and their transmission shall not be subject to a prior mandatory authorisation or verification by the tax authorities, without prejudice to the special measures authorised under Article 395 and already implemented at the time this Directive enters into force.
Article 218 – APPLICABLE AS OF JAN 1, 2028
- For the purposes of this Directive, invoices shall be issued in a structured electronic format. However, Member States may accept documents on paper or other formats as invoices for transactions not subject to the reporting obligations laid down in Title XI Chapter 6. Member States shall allow for the issuance of electronic invoices which comply with the European standard on electronic invoicing and the list of its syntaxes pursuant to Directive 2014/55/EU of the European Parliament and of the Council. The issuance of electronic invoices by taxable persons and their transmission shall not be subject to a prior mandatory authorisation or verification by the tax authorities.
Note:
- ”Reporting obligations laid down in Title XI Chapter 6”= ”Digital Reporting Requirements”
In this serie ….
- ViDA – Impact on business processes – Part 1: End of the Quick Fix on Call-off simplification, start of Special Scheme for transfer of own goods
- ViDA – Impact on business processes – Part 2: Recipient should be able to accept E-invoices, Member States may make it mandatory to issue E-Invoices as of Jan 1, 2024
- ViDA – Impact on business processes – Part 3: Member States ”Shall Allow” ”Domestic Reverse Charge” as of Jan 1, 2025 (Art. 194)
Join the LinkedIn Group on ”VAT in the Digital Age” (VIDA), click HERE
