The course has been set: The European Union has finally approved the comprehensive reform package “VAT in the Digital Age” (ViDA). This will not only introduce mandatory eInvoicing in Europe, but also a digitized sales tax reporting system that will require companies to make far-reaching changes.

With the adoption of the ViDA initiative, the EU is taking a consistent step toward the digitization of sales tax processes. The core objectives:

• Combating tax fraud: Real-time reporting systems are intended to significantly reduce the sales tax gap in Europe.
• Automation & efficiency: Uniform digital invoicing and reporting will reduce the administrative burden on businesses and tax authorities.
• European harmonization: Uniform eInvoicing standards are intended to replace national island solutions and simplify international trade.

The next EU steps toward mandatory eInvoicing

With the entry into force of ViDA, member states can introduce mandatory eInvoicing for B2B transactions under certain conditions – in effect, immediately. Germany has already decided to implement the obligation to accept electronic invoices in the XRechnung or ZUGFeRD format in a series of steps starting on January 1, 2025.

Extended measures from 2027 and 2028

• From January 1, 2027: Minor legal adjustments for companies using the One-Stop-Shop (OSS) or the Import One-Stop-Shop (IOSS).
• From July 1, 2028: New rules for platform operators in the short-term accommodation and passenger transport sectors. In addition, uniform VAT registration and a mandatory reverse charge mechanism for non-identified suppliers will be introduced.

Uniform digital reporting system from 2030

Perhaps the biggest change will be the digital real-time reporting of sales tax data: By July 1, 2030, at the latest, companies in the EU will have to transmit all tax-relevant invoice data directly to the tax authorities. National isolated solutions will be replaced by a centrally harmonized EU-wide reporting system.

Final harmonization of national reporting systems by 2035

Member states that already operate their own digital real-time reporting systems must adapt them to the new EU standards by January 1, 2035, at the latest. Germany has set an ambitious roadmap with the e-invoicing requirement for the B2B sector from 2025, which will be gradually expanded in the following years:

• From 2025: Obligation to accept electronic invoices in the B2B sector.
• By 2028: All companies must be able to actively send electronic invoices.
• From 2030: Implementation of the EU-wide digital reporting system for tax-relevant invoice data.

In an international comparison, Germany is thus pursuing a rapid timetable and wants to exploit the advantages of digitization at an early stage.

What does ViDA mean for companies?

1. Switch to structured invoice formats
   Companies must ensure that their invoices comply with the requirements of EN 16931, i.e., they must be in XRechnung or ZUGFeRD format. PDF invoices or emails with invoice attachments will no longer be sufficient in the long term.
2. Integration of real-time reporting systems
   By 2030 at the latest, companies will need solutions that enable the automatic forwarding of tax-relevant invoice data to the tax authorities. This requires connection to specialized e-invoicing platforms or APIs.
3. Choosing the right technology partner
   The challenges of ViDA implementation are complex, but can be overcome with the right strategy. Companies should check whether their ERP or accounting systems are fit for the new requirements or whether a connection to e-invoicing providers such as the TRAFFIQX® network makes sense.