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
Per January 1, 2028, ”summary invoices” will be abolished as art. 223 of the EU VAT Directive 2006/112/EC will be deleted.
The aim of the new reporting system is to provide information on transactions in almost real-time to the tax administrations and foster the use of electronic invoices. The possibility to issue summary invoices for a calendar month goes against those goals. For that reason, Article 223 is deleted, so there will be no possibility to continue issuing summary invoices.
Current version of Article 223:
Article 223
Member States shall allow taxable persons to issue summary invoices which detail several separate supplies of goods or services provided that VAT on the supplies mentioned in the summary invoice becomes chargeable during the same calendar month.
Without prejudice to Article 222, Member States may allow summary invoices to include supplies for which VAT has become chargeable during a period of time longer than one calendar month.
Impact on businesses: The inability to use summary invoices may have a significant impact on businesses that currently use monthly invoices for e.g. intragroup invoices, with major customers, intra-EU shipments of own goods, etc. These monthly invoices will need to be replaced with invoices per transaction. Questions is what is exactly meant with ”a transaction”. As an example, if goods are shipped on the same day via 2 trucks, is this 1 transaction or will 2 invoices be needed?
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 per Jan 1, 2024
- 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)
- ViDA – Impact on business processes – Part 4: Invoices SHALL be issued in a structured electronic format if subject to Digital Reporting Requirements as of Jan 1, 2028
- ViDA – Impact on business processes – Part 5: An invoice shall be issued no later than 2 working days following the chargeable event as Jan 1, 2028
Join the LinkedIn Group on ”VAT in the Digital Age” (VIDA), click HERE
