Brazil’s tax system is undergoing a historic transformation, and businesses need to be ready. In this webinar, we’ll break down the key elements of the new Tax Reform and what they mean for organizations across different sectors.
European tax authorities are accelerating the move to real-time digital reporting, creating new rules and tighter deadlines for organisations. This session will break down the latest developments in Poland and Bulgaria, including Poland’s draft regulation aligning JPK_VAT with KSeF from February 2026 and Bulgaria’s mandatory SAF-T go-live in January 2026. With clear explanations and a short demo, Sovos’ experts will outline key requirements, practical impacts and how to generate, validate and submit accurate files. Join us to understand how these changes affect your reporting processes and how to prepare for a future-ready compliance strategy.
In this extended instalment of our quarterly VAT Snapshot webinar covering Poland, France, Croatia, Greece, United Arab Emirates and Oman our experts will navigate the complex regulatory landscape, clarify key requirements, and deliver practical guidance to help your teams ensure readiness ahead of these mandate go-lives in 2026.
As the IRS rolls out Form 1099-DA for digital asset transactions, financial institutions that have long reported on traditional securities through Forms 1099-B, 1099-DIV, and others are encountering a new level of complexity. For firms expanding from traditional finance into digital assets, it is essential to understand both the differences and the overlaps between these reporting frameworks. Join Sovos experts as we break down the specific requirements of 1099-DA reporting, from capturing transaction data to calculating cost basis, and compare them with established reporting processes for stocks, bonds, and other traditional instruments. We will also address the risks of treating digital asset reporting as a separate process (spoiler alert – data silos, inconsistent outputs, and operational strain!) Attendees will walk away with strategies for unifying reporting across asset classes. If you want to ensure accuracy and compliance and deliver a seamless customer experience, you don’t want to miss this.
Your SAP S/4 Migration and ‘Always On’ VAT Compliance Are on a Collision Course – Here’s How to Manage
If you’re an SAP user and you want to better understand your options in moving to S/4 in relation to tax compliance, this story should help. Download it now.
Prepare for the SAP S/4 migration to ensure continued tax compliance
SAP users wanting to better understand their options when migrating to S/4 from a tax compliance perspective should read this e-book. Gain insight into the future of global tax, including paperless transactions, business networks and the advent of transaction-orientated indirect tax enforcement.
The e-book also provides examples that explain the options for moving to a new ERP software – an important decision spanning multiple business departments, such as tax, accounting, IT and revenue.
Simplify Your SAP S/4 VAT Migration - Start Reading
Download our e-book to understand:
What are the greenfield and brownfield S/4 migration options?
What has changed in global tax?
What other approaches exist for S/4 migration?
What are the criteria for a future-proof VAT compliance solution?
How can Sovos help?
SAP plans to discontinue support for ECC6 by 2025 and that deadline will loom closer and closer as the months pass by.
It is quite clear from market data that many companies will not be able to migrate to S/4 prior to the 2025 deadline – even 2025 will prove tight on time for many, and in some cases, companies will find this deadline near-impossible to make.
Furthermore, many SAP users are yet to automate procurement and customer interactions: a significantly large proportion of orders and invoices are still exchanged on paper, often using ample scanning and OCR software in accounts payable.
Tax digitization is a trend that continues to rise in importance, with tax authorities across the globe introducing e-invoicing and continuous transaction controls (CTCs) to close the VAT gap. Tax compliance requires processes to be updated to comply with these digital tax changes.
Legacy reporting processes, organizational structures and technologies that continue to directly interact with your ERP systems need to evolve. The transformation of indirect tax is becoming a reality: manual, decentralised or shared service centre-aided indirect tax reporting will become a peripheral activity while your organisation negotiates the transformation to ‘always-on’ compliance.
If these challenges sound familiar, our e-book is equipped to help you overcome them. Our expert team have distilled their knowledge into this easy-to-digest guide on a complex subject that is underpinned by an increasingly urgent deadline.
How Sovos can help
At Sovos our goal is to allow our SAP customers to switch to a single vendor they can entrust their data to. This seamless migration will simplify operations and ensure compliance with each country’s different periodic or continuous controls at any time.
In doing so, you decouple business and tax functionality so you can focus on the former to power your digital and finance transformation – important considerations in an increasingly digital world where widespread digitisation is the expected status quo rather than a purely innovative force.
Sovos provides certainty with a future-proof strategy for tackling compliance obligations across all markets as VAT regulations evolve toward continuous e-reporting and other continuous transaction controls requiring increasingly granular data.
Experience end-to-end handling with compliance peace of mind with Sovos.
VAT in the Digital Age (ViDA) is one of the most significant regulation changes to EU VAT in recent years. Changes to requirements became effective on 12 March 2025 with the official adoption of the package, with further rules coming into effect in 2030.
This blog discusses the changes impacting businesses, including Digital Reporting Requirements, and when they take effect.
Changes effective as of ViDA’s approval on 12 March 2025
Removal of EU approval for domestic e-invoicing
Under the previous VAT Directive, EU approval was required for Member States to introduce domestic mandatory B2B e-invoicing. Countries such as Italy, Poland, Germany, France, Belgium and Romania applied for derogations to mandate e-invoicing. With ViDA, Member States may impose domestic e-invoicing without needing EU approval, provided it applies only to established taxpayers.
Buyer e-invoice acceptance eliminated
The previous EU VAT Directive stated the use of e-invoices was subject to buyer acceptance. Under ViDA, Member States that have introduced mandatory domestic e-invoicing will no longer require buyer consent.
ViDA changes effective from 1 July 2030
Redefinition of electronic invoicing
ViDA redefines electronic invoices. Under the proposal, electronic invoices are those issued, transmitted and received in a structured electronic format that allows its automated processing. This means that non-structured formats, such as pure PDFs or JPEG images, will no longer qualify as an e-invoice. Hybrid formats, such as ZUGFeRD and Factur-X, can remain due to their structured portion.
In principle, electronic invoices must comply with the European standard and the list of its syntaxes pursuant to Directive 2014/55/EU (the “EN” format). However, ViDA allows Member States to use other standards for domestic transactions upon meeting certain conditions.
From 2030, B2B e-invoices compliant with the European standard will be the default and no longer requiring buyer acceptance. However, if a Member State opts for a different mandatory domestic standard, they may either waive or require buyer acceptance for e-invoices using the European standard.
ViDA Digital Reporting Requirements (DRRs) for cross-border transactions
One of the most impactful updates in ViDA is the requirement for near-real-time digital reporting of cross-border transaction data.
Starting in 2030, taxpayers engaging in cross-border transactions within the EU must report invoice data electronically following the EN format. Such DRR will be a condition for taxpayers to exempt VAT in a cross-border transaction or claim input VAT. Each Member State will provide electronic mechanisms for submitting this data.
With ViDA, cross-border e-invoices within the EU must be issued in up to 10 days after the chargeable event. In these cases, DRR must happen at the same time the e-invoice is issued or should have been issued.
Invoices issued by the recipient on behalf of the seller (known as self-billing) and the invoices related to intra-community acquisitions must be reported no later than five days after the invoice is issued or should have been issued or received, respectively.
As expected, DRRs may be carried out by the taxpayers themselves or outsourced to a third party on their behalf.
ViDA Digital Reporting Requirements for domestic transactions
ViDA grants Member States the option to mandate digital reporting for domestic B2B/B2C sales, purchase data, and self-supplies for VAT-registered taxpayers within their jurisdiction. Domestic reporting requirements must align with ViDA’s cross-border DRR standards, and Member States must permit submissions in the European standard format, although other interoperable formats may be allowed.
For Member States with domestic real-time reporting systems in place as of 1 January 2024, compliance with ViDA’s standards will be required by 2035. On the other hand, the package clarifies that other reporting obligations, such as SAF-T, can still exist. This alignment will ensure consistency across the EU in preparation for full ViDA implementation.
Member States have until 30 June 2030 to integrate ViDA’s e-invoicing and DRR provisions into their national legislation, making the Directive effective across the EU by 1 July 2030.
ViDA’s impact on businesses
ViDA represents a significant shift for businesses operating within the EU, promising both opportunities and challenges. By introducing DRRs, ViDA aims to replace obsolete requirements, reduce administrative burdens, improve accuracy, and combat VAT fraud.
The move towards structured e-invoicing and near-real-time digital reporting will require businesses to update their invoicing and reporting systems, driving digital transformation across sectors. While the transition may entail initial adjustments, it is expected to increase efficiency, create a level playing field, and facilitate smoother interoperability between companies using different systems.
In today’s rapidly evolving regulatory landscape, tax departments are under increasing pressure to enhance efficiency, ensure compliance and deliver strategic value. However, securing an investment in tax technology often requires a compelling business case that resonates with organizational stakeholders. With the right strategy and organization buy-in, you can transform your tax.
Join us for this webinar where Sovos experts will be joined by an SAPinsider analyst to discuss how tax leaders can construct a persuasive business case for tax technology investment. Drawing from real-world experiences and best practices, we’ll explore how to align tax technology initiatives with broader organizational goals, quantify both tangible and intangible benefits and effectively communicate the value proposition to decision-makers.
Attend to learn how you can:
Quantify ROI, including cost savings, risk mitigation and process improvements.
Simplify support frameworks by centralizing your tax technology under one.
Transform your tax center into a profit center.
Anticipate future requirements and ensure flexibility in tax processes.
Strengthen your business case and engage stakeholders effectively.
Whether you’re a tax professional seeking to modernize your department or a finance leader evaluating technology investments, this webinar will equip you with the tools and insights needed to build a robust business case for tax technology.
Don’t miss this opportunity to learn how you can transform your tax function into an asset for the business.
Keeping up with evolving tax mandates across multiple countries is challenging. This webinar provides key insights into recent and upcoming regulatory updates—including VAT, SAF-T and e-invoicing—across 12 European countries, helping you stay compliant and prepared.
Hungary’s tax penalty consequences of non-compliance with tax requirements are governed by the Act on Rules of Taxation.
The law outlines a range of sanctions for non-compliance, including tax penalties, default penalties, late payment interest and self-revision fees. This blog will provide an overview of each sanction and summarise recent changes in this area.
Types of sanctions in Hungary for non-compliance
In Hungary, there are four types of payable sanctions for not complying with tax rules. While most of these sanctions are imposed by the Tax Authority, the self-revision fee is calculated and settled through self-declaration.
Tax penalty
A tax penalty is imposed as a result of an audit when the Tax Authority identifies a tax shortfall during an inspection. The standard rate is 50% of the unpaid tax, but it can increase to 200% in some cases.
Default fine
A default fine is a sanction that the tax authority may apply in case of a breach or failure to comply with tax obligations specified in legislation regarding taxes and budgetary subsidies. Most default fines are determined as fixed fees rather than a percentage. The law determines the maximum amount of this fine. The Tax Authority has the discretional right to levy it in the maximum amount, decrease it, or void it.
The amount that the Tax Authority can levy depends on the type of non-compliance and the taxpayer’s status, i.e., whether it is an entity or an individual taxpayer. For example, a default penalty can be levied for missed or late submission of a tax return.
Late Payment Interest (LPI)
LPI is charged when tax liabilities are not paid on time. The interest is calculated daily, and the rate is based on the central bank’s base rate plus five percentage points divided by 365. The Tax Office determines and assesses the amount of LPI.
Self-Revision Fee (SRF)
A Self-Revision Fee (SRF) applies when taxpayers voluntarily amend their tax returns to report a higher amount than initially declared. The SRF is calculated at a rate equivalent to the prime rate. In cases where the same return is revised multiple times, the applicable rate is increased by 50%.
The SRF must be calculated and self-declared simultaneously with the revised tax liability.
The severity of sanctions and applicable settlement rules vary based on the so-called qualification of the taxpayers. Taxpayers are categorised into three groups: Reliable, Neutral and Risky. Reliable taxpayers benefit from more lenient treatment, including reduced default penalties, whereas risky taxpayers are subject to stricter sanctions. For neutral taxpayers, standard penalty levels apply by default.
Changes to Hungary’s tax penalty regime
Recent changes to Hungary’s tax penalty regime include the following.
Increase in default fine
The Hungarian government doubled certain penalty amounts from 1 August 2024:
For individuals, the maximum default penalty increased from HUF 200,000 to HUF 400,000
For legal entities, it rose from HUF 500,000 to HUF 1,000,000
Late Payment Interest (LPI) changes
Effective from 1 January 2025, there were changes in:
Calculation method The payable LPI is calculated monthly. Previously, it was annually.
Payment date Previously, the due date was 15th November of the following year.
Based on the new rules for 2024, the LPI was payable by 31 March 2025. For the months of January to March, LPI is assessed in April and is payable by 22 April (as 20 April 2025 is a public holiday). From April 2025 onwards, LPI is levied and accounted for monthly on the taxpayers’ tax accounts and payable by the 20th of the following month.
Rounding rules Late payment interest should be paid without rounding in HUF.
Notification The Tax Office will not send notifications going forward on the amount of the payable LPI, although one will still be sent once the payment threshold has been reached. LPI will be booked on the tax account, and it should be settled monthly without notification. As a transitional rule, the notifications were sent out by the Tax Office for 2024.
Despite the change in the calculation method, no changes were made regarding the threshold under which LPI is not payable. This amount remained HUF 5,000 annually.
The Hungarian Tax Office issued a notification about the changes in LPI settlement on 11 April 2025 and published the corresponding guidance on its website on 3 February 2025.
Take Action
For further information about tax compliance in Hungary and beyond, contact Sovos’ team of experts today.
VAT in the Digital Age (ViDA) aims to modernise and simplify the European VAT system.
ViDA was officially adopted by the EU on 11 March 2025. The package took 27 months to be approved and adopted, with the initiative initially being proposed by the European Commission in 2022.
The path to adoption included many versions and consultations, which this blog outlines in a timeline.
Want to understand more about ViDA and how it will impact your business? Read our ViDA guide.
2025
25 March 2025 – ‘VAT in the Digital Age’ Published in the EU Official Journal
On 25 March 2025, the VAT in the Digital Age (ViDA) package was officially published in the Official Journal of the European Union amending the following legal instruments:
These amending acts will enter into force on 14 April 2025, with different changes taking effect from that date through to 2035.
This means that in 20 days, the first changes will take effect regarding electronic invoicing rules. Under the new framework, EU Member States will have the flexibility to introduce domestic e-invoicing mandates without needing prior approval from the EU.
11 March 2025 – EU Officially Adopts ‘VAT in the Digital Age’
The VAT in the Digital Age Package (ViDA) has been adopted by the EU on 11 March 2025, 27 months after it was initially proposed by the Commission in late 2022.
The package includes a directive, regulation, and implementing regulation, focusing on three key areas: digitalizing VAT reporting by 2030, requiring online platforms to collect VAT on short-term accommodation and passenger transport services, and expanding the online VAT one-stop-shop to simplify cross-border VAT registration.
The new rules will take effect on the 20th day after publication in the Official Journal of the EU, with Member States required to transpose the directive into national law.
While many rules will come into effect only a few years from now, some will be effective immediately, such as Member States’ right to introduce mandatory domestic electronic invoicing without needing prior authorization from the EU.
12 February 2025 – European Parliament approves ViDA Proposal
The European Parliament has approved the VAT in the Digital Age (ViDA) proposal, bringing it one step closer to official adoption. The proposal will now head to the Council of the EU for final approval, marking a key step in the effort to modernize VAT systems throughout the European Union.
2024
5 November 2024 – Member States agree to adopt ViDA package
The European Parliament has approved the VAT in the Digital Age (ViDA) proposal, bringing it one step closer to official adoption. The proposal will now head to the Council of the EU for final approval, marking a key step in the effort to modernize VAT systems throughout the European Union.
The long-awaited VAT in the Digital Age (ViDA) proposal has been approved by Member States’ Economic and Finance Ministers. On 5 November 2024, during the Economic and Financial Affairs Council (ECOFIN) meeting, Member States unanimously agreed on adopting the ViDA package. This decision marks a major milestone in modernizing the VAT Directive, setting the stage for a more efficient and digital VAT system across the European Union.
Certain changes will take effect immediately once the package comes into force, while others will roll out in stages over the coming years.
The text will proceed to formal approval by the Parliament, after which it will be ready for official adoption.
1 November 2025 – New ViDA Proposal Set for ECOFIN Approval
The Council of the European Union has released a new proposal regarding the VAT in the Digital Age (ViDA) reform.
The proposal aims to modernise and streamline VAT systems across the EU, notably e-invoicing and Continuous Transaction Controls (CTC). Members States will review it on 5 November at the upcoming ECOFIN meeting. The main change in the new ViDA proposal concerns the dates when measures become effective. Deadlines have been postponed as a result of the setbacks ViDA has faced since its initial draft.
If approved, a series of changes will take place over time – some of which will take effect as soon as the Directive enters into force.
25 June 2024 – ViDA Rejected again
During the latest ECOFIN meeting on 21 June, Member States met to discuss if they could come to an agreement to implement the VAT in the Digital Age (ViDA) proposals. At the ECOFIN meeting in May, Estonia objected to the platform rules being proposed, instead requesting to make the new deemed supplier rules optional (an opt-in), allowing Member States to choose whether to implement them in their national VAT legislation or not.
In the meeting a new compromise text was proposed. The compromise text meant that there would be an opt in for the new deemed supplier rules but for SME businesses. Whilst 26 Member States and the commission came to an agreement on this, Estonia could not support the new compromise due to the fact there was no substantial changes since the last meeting and their objections remained. It will now be up to the Hungarian presidency to seek agreement on the proposals, during the second semester of 2024.
2023
November 2023 – Committee on Economic and Monetary Affairs proposes postponement of ViDA
The Committee on Economic and Monetary Affairs from the European Parliament has proposed to postpone most aspects of ViDA for at least one year. The committee cites ongoing delays in the legislative process as a reason for the postponement. The recommendation was decided on a nearly unanimous vote; no members voted against the measure.
If the Committee’s proposal is adopted as written, the revised launch dates for ViDA will be as follows:
E-Invoicing and Digital Reporting Requirements: Member States must implement administrative provisions for digital reporting requirements by January 1, 2029. The requirement for Member States to allow electronic invoicing, subject to common standards and without prior authorization from the tax authority, would take effect January 1, 2025.
Deemed Supplier Rules for Platforms: Member States must implement provisions to harmonize treatment of services facilitated by electronic platforms, and to impose deemed supplier rules for goods facilitated by electronic platforms, by January 1, 2026.
Single VAT Registration: Existing rules for VAT treatment of call-off stock would cease to apply as of December 31, 2025 [no change from original proposal]. Changes to Article 194 of the VAT Directive would take effect by January 1, 2026. Member States must implement provisions to expand the scope of non-Union and Union One-Stop Shop schemes by January 1, 2026.
2022
8 December 2022 – Commission adopts ViDA proposal and issues a follow-up feedback period
May 2022 – Feedback period ends
January 2022 – EU Commission proposes VAT in the Digital Age plan
This webinar will deepen your understanding of cross-border transactions within SAP. Whether you’re navigating the complexities of VAT or seeking to enhance SAP’s capabilities, this session will provide you with actionable insights and strategies to optimise your processes.
Join us on 30 April for our next VAT Snapshot webinar where we’ll be taking a look at the latest e-invoicing updates across 10 countries: Greece, France, Belgium, Malaysia, Philippines, Portugal, Angola, Israel, Slovenia and Croatia.
As governments worldwide continue to shift to Continuous Transaction Controls (CTC) systems, such as e-invoicing and real-time e-reporting, another trend organically unfolds as part of this move towards tax digitisation: pre-filled returns.
With access to real-time transactional level data – and other types of data, such as payroll, inventory and other accounting data transmitted at less regular intervals – tax authorities can facilitate other tax obligations with measures like prepopulating returns. This move ensures that the data submitted via CTC systems become the taxpayer’s single source of truth and highlights the importance of data quality.
Countries such as Chile – the cradle of e-invoicing – along with Indonesia, Spain and Portugal, have now been using pre-filled returns for several years. Many other countries have followed suit, with Greece being one of them.
Pre-filled VAT Returns in Greece: Overview
Greece made this significant step in 2022, introducing a new framework for pre-filled VAT returns based on data submitted through the myDATA platform. The measure aims to increase accuracy, transparency, and administrative efficiency for both businesses and tax authorities.
Greece has also made the pre-filing of income tax returns, namely the Statement of Financial Data from Business Activity (Form E3) based on myDATA, available.
As this framework evolved, Greece made another move. The country’s tax authorities set limits to the adjustments taxpayers could make to pre-filled returns, essentially locking the declarations to a certain extent. Since 2025, a zero-deviation limit has been reached for pre-filled VAT returns, while a more flexible cap is currently in place for Form E3. However, this is also expected to be gradually reduced over time.
What Are Pre-Filled VAT Returns?
Pre-filled VAT returns are VAT declarations that are automatically populated using data transmitted to the digital bookkeeping platform, myDATA. Rather than manually entering figures into the VAT return, taxpayers see their returns pre-filled with data based on their invoices and expense records submitted through CTC regimes.
Under this model, the VAT return becomes effectively “locked”. Taxpayers can no longer freely adjust revenue and expense fields. If discrepancies are identified, businesses must correct the data directly within myDATA to ensure the return reflects accurate information.
Key Regulatory Provisions
Ministerial Decision 1020/2024 is the regulation that outlines the rules governing how submitted myDATA data impacts pre-filled VAT returns, sets the limits on allowable deviations and the procedures for handling correlation difficulties.
The regulation introduced two core compliance rules:
Revenue Rule: VAT returns cannot report income that is less than what has been transmitted to myDATA. Overreporting is allowed.
Expense Rule: VAT returns cannot report expenses that exceed what has been transmitted to myDATA. Underreporting is allowed, including cases where the taxpayer voluntarily chooses not to deduct certain expenses.
Tolerable Deviation Thresholds
The regulation sets temporary thresholds for deviation between declared amounts and those submitted via myDATA to provide transitional relief from the revenue and expense rules. These are called tolerable deviation limits.
The initial rule allowed taxpayers to adjust their income and expenses by up to 30%. However, over time, the limits were gradually reduced. Since January 2025, the threshold has dropped to 0%, which means that there is no possibility of deviating from the amounts locked in the pre-filled return by myDATA under the revenue and expense rules.
Deadline for Corrections
One of the most important compliance aspects is the deadline for updating data in myDATA. Corrections must be made before the submission deadline of the VAT return for the relevant period. After that, the return is locked, and any subsequent changes would require the filing of an amended VAT return.
Pre-Filled Income Tax Returns
Since the 2023 tax year, Form E3 has been pre-filled based on data submitted to myDATA by taxpayers. However, from the 2024 tax year onwards, taxpayers may only modify these pre-filled amounts within certain limits.
According to new rules introduced in March 2025, a 30% deviation limit is established for revenue and expense data reported in Form E3, per tax year, in relation to the corresponding myDATA-reported values.
In addition to deviation limits, the new rules regulate aspects such as the classification of income and expenses, the mandatory reconciliation of reported data with myDATA records and the procedures for handling discrepancies in pre-filled amounts.
However, following the trend seen with VAT returns, deviation limits for Form E3 are expected to be gradually reduced until it is no longer possible to change the pre-filled amounts under the revenue and expense rules.
How to Ensure Compliance?
The move to pre-filled returns represents a broader shift toward real-time, data-driven compliance in Greece. While the framework introduces new responsibilities for taxpayers, it also simplifies the return process and reduces the risk of human error.
With tolerable margins eliminated for VAT returns – and further tightened for Form E3 – businesses should focus on proactive data management to fully benefit from the efficiencies of the new system.
To remain compliant and avoid discrepancies in their VAT returns, businesses operating in Greece should:
Ensure timely and accurate transmission of all invoices and expense data to myDATA.
Regularly reconcile internal accounting systems with myDATA entries.
Address any correlation difficulties early and document the reasons.
Stay informed about the eliminated and shrinking deviation thresholds and prepare for full alignment.
For businesses already familiar with digital reporting under myDATA, the transition should be smooth, but for others, now is the time to prepare.
In a previous blog, we provided an overview of the current and proposed natural disaster-related measurements in some European countries and Australia. In this blog, we will focus on the possible EU-level solution proposed by the European Central Bank (ECB) and the European Insurance and Occupational Pensions Authority (EIOPA) in their latest discussion paper, issued in December 2024.
The proposal, as was also in the case of their discussion paper from April 2023, focuses on the growing “insurance protection gap” in Europe. It highlights that Europe is the fastest-warming continent in the world. If we look back at only the last six months, there were at least three severe climate-related catastrophes in Europe: Portugal wildfires and the Spanish and the Czech Republic Floods.
Among other significant economic consequences of the increasing frequency and severity of natural catastrophes, we need to highlight the impact of these events on insurance businesses and indirectly on the taxation of the insurance premium amounts.
The paper summarises 12 existing national natural catastrophe insurance schemes which we are going to brief in our blog series – adding the current tax treatment of these schemes. In this blog, we provide an overview of the EU-level solutions as proposed by the paper and a summary of the approaches followed by the EU countries.
Proposal for the possible EU-level solution
A two-pillar solution was included in the referenced document. The two pillars are:
EU public-private reinsurance scheme: This would not substitute the national level reinsurance schemes, it would be additional. This scheme would be voluntary and financed by risk-based premium amounts. The aim of this pillar is to increase the insurance coverage of the natural catastrophe risk where insurance coverage is low.
EU fund for public disaster financing: This second pillar would be made compulsory and aims to finance rebuilding efforts after a high-loss natural disaster. Contributions from member states would finance this.
Both of these pillars could potentially affect the amount of tax payable by the insurance companies on the collected premium amounts. The first pillar might indirectly increase the tax amount levied on the reinsured premium amount, such as in the case of France CCR (Caisse Centrale de Réassurance), where IPT (and contributions to the Major Risk Prevention Fund) is due on the CATNAT premium. The second pillar may trigger newly introduced contributions that might be levied on the insurance premium amounts.
Summary of the national level approaches
The current national schemes aim to broaden insurance coverage. Some countries, like Italy most recently, make certain natural catastrophe risks such as earthquakes, floods and landslides compulsory to be insured by either or both entities or individuals.
In other cases, compulsory reinsurance involving public-private sector coordination exists. The most well-known reinsurance system exists in France, the so-called CCR. However, there is a reinsurance system in Iceland, where insurers collect CATNAT premium amounts and pay them towards NTI (Icelandic Natural Disaster Insurance).
It remains to be seen the extent to which the proposals are acted upon and the impact that they may have on premium taxation regimes in the EU. As it is such a significant topic in insurance currently, Sovos will be keeping a close eye on developments in this area.
Join Sovos at the 18th Group Indirect Tax Exchange and gain insights from our expert on the Industry Adoption of E-Invoices and E-Reporting Challenges. Stay ahead of the latest e-Invoicing conversations and make the most of this premier conference and networking event. Reserve your ticket today!
Discover Romania’s recent SAF-T implementation and its complexities with E-Reporting, E-Invoicing, and E-Transport. Learn from established systems in Portugal, Denmark and Norway, and prepare for upcoming SAF-T rollouts in Bulgaria and Hungary, as well as new E-Invoicing mandates across the EU.
Join us for an in-depth webinar designed to help event organisers navigate the complexities of VAT compliance for international events. Discover essential steps for handling cross-border VAT, understand Place of Supply rules for physical and virtual events (including the new 2025 updates) and learn how to avoid common VAT risks.
Our VAT Snapshot series aims to provide you with information to untangle the complex web of tax obligations created by multi-national trading, helping you stay compliant with the latest tax requirements across Europe. In our first webinar of 2025, we’ll discuss the latest e-invoicing updates in Poland, Estonia, Greece and Portugal.
