Pagero comments on the digitalization proposal (ViDA) by the European Commission

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Sarah Fane
Jan 9, 2023
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On 8th December 2022, the European Commission (EC) presented their proposal to further digitalize and harmonize invoicing and VAT reporting in the EU (referred to as VAT in the Digital Age or ViDA).

View the EU's Q&A Here

View the EU's factsheet here

The proposal aims to make e-invoicing the new norm within the EU for both domestic and intra-Community transactions, phasing out the use of PDF by 2024 and paper latest by 2028. Further, it is proposed that starting from 2024 EU Member States will be allowed to implement country-wide e-invoicing obligations without prior approval of the Commission (which is the case today). 

“In recent years, we have seen countries such as Italy, France and Poland announcing their intentions to mandate the digitalization of invoicing and tax reporting, and we are now very excited to see this happening on the EU-wide level. We expect this to have a tremendous impact on the speed of e-invoicing adoption across many of our established and investment markets (even outside of the EU), but it will also create more harmonization in a currently complex landscape”, says Bengt Nilsson, CEO of Pagero.

Besides the landmark reform of e-invoicing, the Commission also proposes a unified Digital Reporting Requirements (DRR) schema, which will become mandatory for intra-Community and optional for domestic transactions starting from 2028. DRR will be facilitated by the implementation of mandatory e-invoicing as outlined above. 

“Given that ca 50% of EU’s VAT gap, which for 2020 was estimated to 93 billion EUR, derives out of intra-Community transactions, the Member States have long contemplated various solutions for how to tackle this costly challenge. The decision to abolish the aggregated periodic VAT Listings in favor of real-time transactional reporting of sales and purchase invoices is truly groundbreaking. As e-invoicing is intended to become mandatory, it will facilitate such real-time transactional reporting. We welcome EU’s proposal to embed compliance requirements within the everyday business processes – something Pagero has been advocating for in various forums throughout the years”, says Nazar Paradivskyy, VP Regulatory Affairs at Pagero.

While ViDA is still subject to public consultations and later approval by the European Parliament and the European Council, it gives a clear indication of the ambitious digitalization agenda set by the EU. 

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