The Rise of Continuous Transaction Controls in Eastern Europe

Joanna Hysi
April 21, 2021

We’ve recently seen several Eastern European countries begin their journey of implementing continuous transaction controls (CTC) as an efficient tool for combating tax fraud and reducing the VAT gap.

The CTC frameworks may vary in nature, scope and implementation, but they all have one thing in common: an ambition to achieve operational efficiency for businesses as well as increase government control over business data to combat tax fraud and evasion.

Let’s take a closer look at some of the upcoming CTC developments in the region.


The Slovakian Ministry of Finance has announced that it is preparing legislation for the introduction of a CTC scheme in the country. This follows in the footsteps of countries such as Italy, Hungary and Spain. The aim is to lower Slovakia’s VAT gap (20%) to the EU average (11%) as well as obtaining real-time information about underlying business transactions.

The proposed Slovakian CTC scheme will require businesses to report invoice data to the tax authority prior to issuing the invoice to their trading parties, who will also have an obligation to report the invoices received. The data will be sent through either a certified accounting software or the government portal (which is currently under development).

A public consultation on the draft law was concluded in March 2021, a sign that the Slovakian government is making steady progress in the legislative process. However, no roll-out timeline has been announced yet.


Bulgaria is also looking to introduce CTCs. The National Revenue Agency (NRA), Bulgaria’s tax authority, announced it’s considering making e-invoicing and the transmission of invoices to the tax authority mandatory. This could be done either via a supplier’s e-invoicing software or software developed and hosted by the tax authority itself.

The NRA is reviewing the e-invoicing proposal with relevant industry stakeholders to decide whether or not to adopt a mandatory e-invoicing model. A decision about the adoption of a CTC scheme is expected by the end of 2021.


Just like Bulgaria, Serbia has also announced its intentions to introduce mandatory e-invoicing in the hope the reform will bring benefits to businesses as well as government insight into business operations.

The Serbian government has adopted e-invoicing legislation that outlines the issuance of electronic invoices for B2B and B2G transactions, the e-invoice system, the elements an e-invoice should contain and e-archiving.

As part of the new scheme, which was adopted as law in March 2021, invoices and other accounting documents must be issued and exchanged in electronic form (in the Serbian electronic invoicing standard, UBL 2.1.) and signed with a digital signature.

Although there are further details to be published, the law sets out an entry into force in stages:

  • From 1 January 2022: B2G e-invoices will become mandatory
  • From 1 July 2022: All taxpayers will be obliged to receive and store e-invoices
  • From 1 January 2023: All taxpayers will be obliged to issue B2B e-invoices

At this stage, the details of how the e-invoice system should be accessed and used are still undetermined. However, it is clear that since the expectation is that B2G and B2B invoices shall be reported to the tax authority’s central register in real-time, the process will contain a CTC element.


With the largest VAT gap in the EU (35.5% in 2017), Romania is looking to introduce tax controls in the shape of Standard Audit File for Tax (SAF-T) requirements. This will provide the the Romanian National Agency for Fiscal Administration (ANAF) with greater visibility into a wide range of business accounting.

Developed in 2005 by the OECD, SAF-T obligations have been introduced in several EU countries including Portugal, Luxembourg, France, Austria, Poland, Lithuania, and Norway. Following in the footsteps of these countries, the ANAF announced a project to include the implementation of SAF-T. After several delays, it’s expected to conclude in July 2021.


Croatia is one of the first countries in the world to have introduced a system of real-time reporting of retail transactions to the tax authority, a so-called online fiscalization.

This system aims to combat retailer fraud by providing the tax authority with visibility of cash transactions in real-time and encouraging citizens to participate in the control of tax compliance by validating the fiscal receipt through the tax authority’s web application.

To make tax controls easier, the government introduced a QR code requirement for fiscal receipts for cash transactions in January 2021. Consumers must validate their receipts by either entering the JIR on the web application or scanning the QR code.

With CTC initiatives becoming increasingly popular across governments and tax authorities in Europe, it won’t be long until adopting such regimes has become the new norm for tax policy in the region.

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Joanna Hysi

Joanna is a Senior Regulatory Counsel at Sovos. Based in Stockholm and originally from Greece, Joanna’s background is in commercial and corporate law with research focus on EU law and financial innovation. Joanna earned her degree in Law in Greece and her masters in Commercial and Corporate from London School of Economics and Political Science (LSE) in London.
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