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E-Invoicing & E-Reporting developments in the news in week 48/2024

4 days ago
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8 min read

Click HERE for the PODCAST version discussing ”E-Invoicing & E-Reporting developments in the news in week 48/2024”

Follow the latest updates on E-Invoicing and Real Time Reporting on www.vatupdate.com and the LinkedIn pages on E-Invoicing/Real Time Reporting and ViDA.

HIGHLIGHTS

  • 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.

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