Preparing for new e-invoicing and e-reporting regulations

More and more countries are embracing the e-invoicing and e-reporting trend. The upcoming changes include the ViDA proposal and new regulations in B2B & B2G transactions.

How can international companies and taxpayers prepare for the imminent revolution in data exchange? Let’s dive into the future of e-invoicing and the most important trends, challenges, and solutions.

E-invoicing and e-reporting in Europe

European governments are slowly going paperless, with EDI changes are soon to be introduced in countries such as Poland, Romania, Spain, Germany, Belgium, Croatia, Greece, Italy, and Portugal. The new laws are related mostly to the introduction of obligatory e-invoicing in B2B and B2G transactions, which is expected to standardise and simplify the process of data exchange between business parties. The main goal of the e-invoicing revolution is to help tax authorities obtain better visibility over transactions and empower them to enforce tax controls with greater efficiency. Most of these changes will start coming into force at the beginning of 2024, and will be amplified and expanded later. By 2028, most of the abovementioned countries will be almost fully operating on the e-invoicing and e-reporting system.

The ViDA proposal – pitfalls and opportunities

One of the biggest EDI changes to come relates to ViDA (VAT in the Digital Age) , which aims to standardise electronic invoicing and digital reporting frameworks across all EU countries, as well as reduce the VAT gap that currently reaches as much as EUR 93 billion. First introduced in December 2022, the proposal will make e-invoicing and real-time e-reporting standard in Europe by January 1, 2028.

ViDA will introduce multiple changes, such as:

• Standardised digital reporting requirements (DRR)
• Obligatory e-invoicing for cross-border transactions
• Phasing out the option of issuing summary invoices
• Permitting Member States to enact B2B e-invoicing without requesting an exemption from the EU Parliament

The current shape of ViDA is still under consideration. The implementation of the ViDA changes is set to happen between 2024 and 2028.

What are the CTC models?

Adapting to the new e-invoicing and e-reporting regulations will require a deep understanding of continuous transaction control (CTC) models, which are different approaches that governments and tax authorities use to regulate and monitor transactions electronically. They are designed to enhance transparency, reduce tax evasion, and streamline compliance.

There are four CTC models, including:

1.  The real-time reporting model, in which businesses are required to report their transactions to tax authorities in real or near real time. 
2. The clearance model, in which businesses must obtain approval from the tax authority before issuing an invoice. 
3. The centralised exchange model, in which a central authority (usually a government or a designated entity) acts as an intermediary between businesses and tax authorities, validating transaction data before sending that information to the tax authority. 
4. The decentralised continuous transaction control and exchange model, in which businesses interact directly with tax authorities and submit their transactions in real time or periodically to later receive validation straight from the authorities (without the need for an intermediary). 

Comarch can help you adapt to the new e-invoicing reality

Maintaining compliance in the face of the new changes in e-invoicing and e-reporting can be very difficult – especially for large companies and businesses operating internationally. To keep up with all the upcoming regulations, sign up for Comarch’s webinar (feat. Forrester). Our experts will guide you toward a stress-free transition to electronic invoices. For a practical solution to streamline and automate all of your AP/AR invoicing processes, visit our webpage and learn about Comarch e-invoicing.