The #EU #Commission has put forward a proposal for a Council Directive amending Directive 2006/112/EC, as regards VAT rules for the digital age, in order to tackle fraud and to modernize the #VAT system. The so-called #ViDA package will, amongst others, significantly alter the current #invoice legal framework.
In what concerns the statutory changes to the issuing of invoices, we would like to outline the following:
- E-invoices will become mandatory to all B2B intra-Community transactions.
- The deadline for issuing e-invoices concerning intra-Community supplies (or for which the reverse charge rule applies) is of 2 working days (to be counted from the date of the chargeable event).
- Additional data is to be included in invoices, so to ensure: (i) the (holistic) use of e-invoices; and (ii) that the process of reporting will become fully automated.
- A new digital reporting requirement system (i.e., a newly centralized VIES system) for intra-Community transactions will be put into place, providing information on a transaction-by-transaction-basis. This information will feed into the risk analysis systems of the Member States, to help them counter VAT fraud.
- The information for the digital reporting requirement system will have to be submitted by taxable persons within 2 working days (to be counted from the date the invoice is issued) to their (domestic) tax authorities.
- If the data is not fully reported (or if it does not contain the correct data) the VAT exemption for intra-Community supplies, mentioned in article 138 of the VAT Directive, will not apply.
- Information collected by Member States must be submitted (within 1 day after being gathered) to the centralized VIES system. The information will remain available for 5 years.
- Member States may not impose any additional (legal) reporting obligations on transactions subject to the digital reporting requirements. Should the reverse charge rule apply, a tax representative must be appointed (being liable for VAT payments) and in case of intra-Community acquisitions, the person liable for these transactions is the one that should legally submit the data.
- It will no longer be possible to issue summary invoices.
- Recapitulative statements will be abolished. However, taxpayers that make intra-Community acquisitions of goods (i.e. the purchaser) must provide data to their (domestic) tax authority (it is currently optional for Member States to require the submission of this data).
- Member States can opt to introduce or to maintain a digital reporting system for other transactions. If they do so, they will need to implement a system that includes the features of the above-mentioned (harmonized) reporting system, for intra-Community supplies.
- Use of paper invoices will only be accepted by previous authorization, given by Member States. Paper invoices cannot be used for intra-Community supplies within the scope of the digital reporting requirement system. The requirement for authorization of the recipient to issue an e-invoice is no longer applicable and is to be removed from the VAT Directive (this legal change will apply as of 1 January 2024).
- From the 1st of January 2024 onwards, taxable persons will always be allowed to issue e-invoices, in accordance with European Standards (i.e., the standards mentioned in the Commission Implementing Regulation nº. 2017/1870).
- There is to be no pre-clearing of e-invoices (this will apply as of 1 January 2024). An exception occurs, for special measures authorized under Article 395 of the VAT Directive, which have been already implemented by any given Member State, at the time the directive enters into force.
- The new rules/regulations will come into effect as of the 1st of January 2028.
To keep track of EU Law:
Document 52022PC0701- Proposal for a COUNCIL DIRECTIVE amending Directive 2006/112/EC as regards VAT rules for the digital age – COM/2022/701 final.
Pedro Costa Monteiro
February 2023