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.
Ireland E-invoicing
Ireland gave electronic invoicing the same legal weight as paper invoices in 2013. Since then, there have been no major developments regarding mandating e-invoicing in the business-to-business space.
Nevertheless, as part of the European Union, Ireland will soon need to work on implementing the European VAT in the Digital Age (ViDA) initiative, which aims to introduce mandatory e-invoicing and real-time reporting for cross-border transactions by July 2030.
This page details Ireland’s current stance on e-invoicing. Be sure to bookmark the page to stay in the know with any future developments.
There is no mandate for issuing and receiving electronic invoices for B2B transactions in Ireland.
Irish businesses can issue and receive electronic invoices and must consider the following legal aspects when implementing e-invoicing in the country:
Obtaining the consent of the buyer to send an electronic invoice.
Ensuring integrity and authenticity – any means are accepted, from internal process controls up to electronically signing the e-invoices.
Retention – e-invoices must be stored in such a way as to guarantee their integrity, authenticity and availability during the retention period. The retention period for electronic invoices is six years from invoice date.
The country’s tax authority is looking to modernise its VAT system. In late 2023, it launched a public consultation to understand how organisations feel about digitally transforming tax processes and proposed imposing a mandate for e-invoicing and real-time reporting when transacting domestically. The key driver of the consultation was the ViDA initiative.
Through the public consultation, the Irish tax authority managed to gather valuable insights from more than 1,000 businesses, aiming to use them in the design and implementation strategy phase.
With the final approval of ViDA Ireland will be able to impose mandatory e-invoicing in the country without the currently needed formal authorisation from the EU.
B2G e-invoicing in Ireland
While it is mandatory for central authorities, regional authorities and local authorities in Ireland to receive and process e-invoices, it is currently optional for suppliers to send electronic invoices.
The preferred national format for e-invoicing is Peppol BIS, but public administrations have defined their own format known as CIUS-CEFACT.
The Irish government encourages public sector organisations to utilise the Peppol framework when receiving e-invoices from suppliers.
The use of Peppol in Ireland
Ireland joined the OpenPeppol association on 18 January 2018.
The country’s Office of Government Procurement (OGP) operates the Irish Peppol Authority, which is responsible for registering companies wanting to become a Peppol Access Point or Service Metadata Publisher in Ireland.
1 January 2013: E-invoices are given same legal weight as paper invoices
18 April 2020: All public authorities can receive Peppol e-invoices via the Peppol eDelivery Network
13 October 2023: Ireland launches public consultation on e-invoicing and real-time reporting requirements
1 July 2030: Irish businesses need to comply with VAT in the Digital Age requirements (mandatory e-invoicing and e-reporting for cross-border B2B transactions).
Setting up e-invoicing in Ireland with Sovos
It seems inevitable that mandatory e-invoicing will arrive in Ireland. When that time comes, it’s important that your organisation is prepared for your new obligations.
Any new mandates only add to your compliance burden, with e-invoicing requirements being fragmented and unique to each country. Ensure you comply with your obligations, everywhere you do business, by working with Sovos.
Choosing Sovos means choosing a single vendor for all of your tax compliance needs.
Ireland does not mandate the use of electronic invoices. Public sector organisations must be able to receive e-invoices, but suppliers can choose whether or not to issue such documents electronically.
There are no officially announced dates for introducing mandatory e-invoicing or real-time reporting in Ireland. However, as part of the European Union, the country needs to implement the ViDA initiative by July 2030 and can start mandating e-invoicing as soon as ViDA is approved.
The United Arab Emirates (UAE) plans to introduce electronic invoicing requirements in 2026. The country’s project, known as the E-Billing System, includes plans to regulate both B2B and B2G transactions.
While the system has yet to be implemented, taxpayers should prepare for it so they can be compliant from day one. This page has the information you need to get started.
Compliance requirements for e-invoicing in the UAE
While no e-invoicing mandate currently exists in the United Arab Emirates, it does already permit the electronic exchange of business documents—so long as the medium and format are agreed upon by both the buyer and seller. To ensure the document’s authenticity and integrity, it must be stored in the same format in which the buyer issued it and signed with an e-signature.
Once a mandate is in place, taxpayers in the UAE will have to issue and receive electronic invoices through an Accredited Service Provider (ASP). According to the announced plan, only ASPs will be allowed to connect with the Tax Authority Platform to submit e-invoice data. Therefore, taxpayers will need to enter a commercial agreement with an ASP and integrate systems to allow for document transmission.
Electronic invoices will need to be sent in XML format, and the ASP will also share the invoice data with the Federal Tax Authority (FTA).
Timeline of e-invoicing adoption in the UAE
Here are the key dates in the United Arab Emirates’ e-invoicing journey so far:
11 July 2023: The Ministry of Finance (MoF) reveals five major digital transformation projects, including plans for an e-invoicing initiative known as the E-Billing System
14 February 2024: The Ministry of Finance (MoF) reveals plans for its E-Billing System
2 October 2024: MoF launches e-invoicing portal to provide information on upcoming requirements for businesses
30 October 2024: The UAE Official Gazette includes amendments to the national VAT law, driven by the upcoming e-invoice mandate in the country, which introduces e-invoicing considerations to the VAT law.
6 February 2025: MoF launches a public consultation on e-invoicing to gather feedback on proposed e-invoicing data requirements
The timeline announced for the roll-out of the UAE e-invoicing mandate is:
Q4 2024: Requirements and procedures for service providers to be developed
Q2 2025: E-invoicing legislation to be published
Q2 2026: The first phase of B2B and B2G requirements begins
Peppol e-invoicing in the UAE
The UAE’s Ministry of Finance has highlighted Peppol as a pillar of its e-invoicing framework.
Peppol is an international, EU-born protocol and framework that aids in simplifying cross-border and governmental trade. While its adoption is widespread across Europe, it is also standardising trading in countries such as Australia and Singapore.
The United Arab Emirates plans to implement a Five Corner Model for its Peppol implementation, and the nation’s Federal Tax Authority (FTA) will serve as a Peppol Access Point to enable taxpayers to exchange electronic invoices.
There are currently no strict requirements for electronic invoicing in the United Arab Emirates. Businesses can voluntarily send and receive e-invoices should both the buyer and seller agree on the medium and format.
The Electronic Transactions and Trust Services law in the United Arab Emirates was devised to regulate the validity of electronic documents. The law boosts the legal weight of digital signatures and has provisions for how electronic documents are sent, saved and stored.
The United Arab Emirates’ Ministry of Finance plans to publish the regulatory framework for the new e-invoicing system in Q2 2025. The first phase of mandating electronic invoicing for B2B and B2G transactions will start in Q2 2026.
Short for Standard Audit File for Tax, SAF-T is an XML-based file type used to exchange tax information electronically to tax authorities. The goal of the initiative is to enhance tax compliance and streamline data exchange between taxpayers and tax authorities.
SAF-T is an international standard used across Europe, including countries such as Poland, France, Germany, Romania, Lithuania, Norway and soon Bulgaria.
Different types of information typically have varying reporting requirements. For example, once implemented in Bulgaria, SAF-T rules will require the monthly filing of general ledger entries, purchase and sales invoices and payment records – while asset information must be submitted annually.
When to submit a SAF-T declaration in Bulgaria
SAF-T’s implementation in Bulgaria begins in January 2026. There will be three mandated SAF-T reports, all with different reporting cadences.
Monthly – submitted by 14th day of following month: General ledger, Accounts Payable and Receivable, Sales and purchase invoices
Annually – submitted by 30 June of following year: Fixed assets
On-demand: Inventory
Bulgaria SAF-T implementation timeline
Here are the key dates in Bulgaria’s SAF-T plans.
January 2026: SAF-T applies to large enterprises that either have:
Net sales revenue for 2023 exceeding BGN 300 million (approx. 150 million EUR)
Tax and social security contributions collected exceeding BGN 3.5 million
January 2027: SAF-T applies to large, medium and small enterprises that either have:
Net sales revenue for 2024 exceeding BGN 300 million (approx. 150 million EUR)
Tax and social security contributions collected exceeding BGN 3.5 million
January 2028: Large, medium and small enterprises that either have:
Net sales revenue for 2025 exceeding BGN 15 million (approx. 7.5 million EUR)
Tax and social security contributions collected exceeding BGN 1.5 million
January 2029 – SAF-T applies to all large, medium and small enterprises – regardless of additional conditions.
January 2030 – SAF-T also applies to micro-enterprises.
Note: There will be a six-month grace period for SAF-T reporting, and taxpayers can submit corrections to submitted files within six months without being penalised by the tax authorities.
Implementing SAF-T as a business
Complying with your tax obligations is vital. In the coming years, SAF-T will serve as another requirement for Bulgarian taxpayers, providing deadlines for the accurate reporting of important data. This will only add to your compliance workload.
Sovos SAF-T solutions can help your organisation to spend less time on compliance and more on growing your business. Automate your preparation process to drive efficiency and ensure accuracy, providing peace of mind that you will avoid potential fines and penalties.
SAF-T is not mandatory in Bulgaria, though its legal implementation begins in 2026 for qualifying large businesses. It will be obligatory for businesses of all sizes in Bulgaria from January 2030.
From January 2026, large enterprises will need to file SAF-T reports if their net sales revenue for 2023 exceeds BGN 300 million or tax and social security contributions collected exceed BGN 3.5 million.
From January 2027, large, medium and small enterprises will have to file SAF-T reports if their net sales revenue for 2023 exceeds BGN 300 million or tax and social security contributions collected exceed BGN 3.5 million.
From January 2028, large, medium and small enterprises must comply with SAF-T requirements if their net sales revenue for 2025 exceeds BGN 15 million or tax and social security contributions collected exceed BGN 1.5 million.
From January 2029, Bulgaria’s SAF-T obligation will expand to include all large, medium and small enterprises. This will grow to include micro-enterprises in January 2030.
From 2026, applicable taxpayers in Bulgaria will have to submit SAF-T reports as per the following:
General ledgers, Accounts Payable Receivable, and sales and purchase invoices must be submitted monthly – specifically by the 14th day of the following month.
Fixed assets must be reported annually – specifically by the 30 June of the following year.
Inventory reports must be submitted whenever requested – this is an on-demand reporting process.
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.
February 10 to 12, 2025 in Dubai
The Middle East and Africa are facing a rapidly evolving landscape for E-Invoicing and VAT reporting. We follow this development and continue the successful first two editions of the E-Invoicing Exchange Summit and proudly announce the 3rd edition to be held in Dubai from February 10 to 12, 2025.
On the pre-conference day, Monday, February 10, you will have the opportunity to start the E-Invoicing Exchange Summit by attending the workshop “GENA Academy Essentials: Everything You Always Wanted to Know About E-Invoicing, but Were Afraid to Ask”. Furthermore, a great networking opportunity awaits you with the Icebreaker Reception in the early evening. The conference itself will take place on Tuesday and Wednesday, February 11 and 12, including the Networking Dinner on Tuesday evening.
Insightful presentations and interactive roundtable sessions on
Mastering E-Invoicing Now: Actionable Steps for Compliance and Efficiency
Streamlining Compliance for UAE E-Invoicing with SAP Document and Reporting Compliance
Convergence of Digital Real-Time Controls & Business Automation
Managing Tax Compliance Risks in the Middle East Post-E-Invoicing
Big Data vs Big Brother – How Mirror Visibility Drives Indirect Tax Consolidation
Global and Regional Compliance Update + Implementation and Adoption Progress Reports from around the Globe
France is one of the most challenging countries in Europe when it comes to the premium tax treatment of motor insurance policies. This is mainly due to the variety of taxes and charges that can apply and the differing treatment of different vehicle types.
This blog provides all the information you need to know about the correct treatment in France.
Which taxes are payable in relation to motor insurance policies in France?
First and foremost, Insurance Premium Tax (IPT) applies to motor insurance provided in France. The rate can vary (rates correct as of December 2024):
The standard rate for risks of any type relating to motor vehicles is 18%
The rate is usually 33% in the case of compulsory class 10 motor liability coverage
The rate for compulsory class 10 coverage is reduced to 15% for coverage provided to commercial agricultural vehicles and commercial vehicles greater than 3.5 tonnes
Class 3 motor cover is treated as a form of property coverage within the scope of contributions to the EUR 6.50 Common Fund for Victims of Terrorism when located in France. There is also a requirement to collect a CATNAT premium (with specific rates for motor coverage which are increasing from January 2025). IPT and contributions to the Major Risk Prevention Fund are due on this premium.
Compulsory class 10 cover triggers National Guarantee Fund contributions. This currently results in three separate rates applicable to premiums, set at 1.2%, 0.8% and 0.58%, respectively.
Finally, it is worth noting that class 3 or 10 coverage of vehicles used for agricultural operations may be excluded from the scope of contributions to the Major Risk Prevention Fund. They do, however, result in separate contributions of 11% due to the National Agricultural Risk Management Fund.
How are taxes on motor insurance policies calculated in France?
The majority of taxes and charges on motor insurance policies in France are calculated as a percentage of the taxable premium and are directly charged to the insured. There are some exceptions, though.
Where applicable, the 0.58% National Guarantee Fund contribution and contributions to the Major Risk Prevention Fund are both insurer-borne so do not result in direct additions to the premiums charged to the insured.
The EUR 6.50 contributions to the Common Fund for Victims of Terrorism are a fixed fee and apply to each insurance contract per annum – regardless of the premium value.
It should also be noted that the IPT treatment of motor insurance can be extended to include ancillary coverage, such as passenger accident cover. This is because the IPT treatment applies to risks of any nature relating to land motor vehicles. It is important to assess each risk to determine whether it is considered a risk related to land motor vehicles as this can be a contentious area in French law.
What vehicles are exempt from tax in France?
Electric vehicles are subject to an IPT exemption, albeit this was amended from January 2024 so that 75% of the premium was treated as exempt (with the remaining 25% being taxable as normal).
A 75% exemption applies to insurance incepting in 2024 for vehicles registered in 2024, but only in relation to the first insurance contract following the vehicle’s registration up to a maximum of 24 months. There is no law currently in effect extending this treatment for vehicles registered in 2025, so such vehicles will not benefit from the 75% exemption as it stands.
Coverage of any nature relating to commercial agricultural vehicles and commercial vehicles greater than 3.5 tonnes benefits from a full IPT exemption, except compulsory class 10 coverage. However, this does not provide an exemption from the applicability of the parafiscal charges mentioned above.
If you still have questions about the taxation of motor insurance policies or IPT inFrance, speak to our experts.
On 5 November, the long-awaited EU Commission’s VAT in the Digital Age (ViDA) proposal was approved by Member States’ Economic and Finance Ministers (ECOFIN). This webinar will examine the three pillars of the ViDA package and how you can prepare for the changes it will bring.
European tax authorities are advancing SAF-T implementation, introducing new requirements that will impact VAT compliance across the region. This webinar will offer insights into key updates, including Portugal’s SAF-T delay to 2026, Ukraine’s on-demand SAF-T for large taxpayers in 2025, Greece’s mandatory transport data fields in myDATA e-books from 1 December 2024, Romania’s SAF-T extension to non-established companies and mandatory e-reporting of B2C invoices from January 2025 and France’s reduced PPF scope and new PDP designation requirement for all companies.
In this webinar, we will revisit the foundational principles behind this mandate, covering its evolution up to the latest developments, so you have all you need to keep your business compliant.
Update: 12 March 2025 by Kelly Muniz
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.
Next Steps
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.
The ViDA package marks a significant step towards modernizing VAT in the digital era, streamlining processes for businesses, and improving cross-border efficiency.
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.
ECOFIN Agrees on ViDA
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.
Read our blog below for a detailed breakdown of the amendments impacting e-invoicing obligations, the new Digital Reporting Requirement (DRR), and the timeline for these changes.
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.
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. Here is an overview of the key updates, particularly on e-invoicing and CTC requirements.
What is new, and why the delay?
The new proposal does not substantially modify its previous version. 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.
The ViDA proposal has faced delays due to the complexity of its objectives, which are mainly to harmonise the varying VAT systems within the EU. In addition to the extensive consultations held during this process to balance different stakeholders’ interests, an approval of ViDA requires the alignment of Member States’ views and priorities.
This has proved a significant hurdle, as Member States have raised their concerns regarding different aspects of the proposal, such as implementation costs and alignment with EU data privacy rules, among others. ViDA must also go through the formal steps for approval by the European Parliament and the Council of the EU.
These factors combined have made ViDA adoption a lengthy process, but its implementation promises significant benefits in public and private sectors across the EU.
Recap: What is ViDA and what changes with its adoption?
Changes effective with the ViDA’s approval
Removal of EU approval for domestic e-invoicing: Under the current VAT Directive, EU approval is required for Member States to introduce domestic mandatory B2B e-invoicing. Countries such as Italy, Poland, Germany, France, Belgium and Romania have 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 current EU VAT Directive states that the use of e-invoices is 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.
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.
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 proposal 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
The ViDA proposal 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.
The French tax administration has just announced structural changes to the 2026 French e-invoicing mandate that will discontinue the development of the free state-operated invoice exchange service. This decision will put increased pressure on taxpayers and software vendors to select a certified ‘PDP’ to fill the void created by this decision.
A complex scheme, years in the making
When France introduced mandatory business-to-business e-invoicing in its 2020 Finance Law, the tax administration conducted a broad comparative study of how other countries had implemented similar obligations. However, France adopted a unique approach, creating the complex ‘Y model,’ which combined elements from several countries’ systems. Like Italy for example, it included a central state-operated platform (the ‘PPF’) that businesses could use as a free, basic service for the exchange and reporting of e-invoices.
Division of labor between PDPs and the PPF in the original ‘Y-scheme’ design
In parallel with the PPF’s own ability to exchange e-invoices for French taxpayer, the French tax authority solicited candidate PDPs to perform the same function for more complex business use cases.
These organizations were registered, put through vigorous testing and some were pre-approved, pending final testing with the PPF. PDPs are designed to seamlessly exchange invoices with each other and are required to report these transactions to the PPF.
And as it turned out, many companies in the French market decided to use a PDP to organize the exchange of invoice data with trading partners in a way that fits their unique business circumstances. Other French businesses counted on the availability of the free-of-charge PDP services to be provided by PPF, rather than selecting a private PDP.
The overall architecture of data flows between the public and private entities involved in the French scheme led to unprecedented complexity in the technical specifications released by the public administration. It has been clear for some time that this complexity was putting strain of budgets and timelines for the technical development of the PPF by the French public administration.
How does the PPF’s scope change impact businesses that were relying on the free PFF?
The French tax administration (DG-FIP) announced on 15 October that while the development of the PPF will continue, its focus will shift to providing directory services for routing e-invoices, without offering PDP services.
As a result, many French businesses and software vendors now face the challenge of securing the services of a private PDP. Although the e-invoicing mandate’s go-live date on September 2026, initially applies only to the largest businesses, more than four million companies will have to rely on PDP-enabled accounting software to receive those transactions regardless of their size.
Take Action
Sovos was one of the first PDPs to be pre-authorized by the French tax authority and brings more than two decades of experience providing compliance technology for businesses in France. Sovos is uniquely positioned to meet the needs of companies that must now choose a reliable provider.
You may think complying with Peru’s VAT obligation is simple, but there is plenty to consider. Peru has several mandates at play for businesses, such as e-invoicing, and both time and effort are required to stay compliant.
Consider the need to stay on top of mandates as they evolve, and you will realise that your organisation needs to pay constant attention to what you do in the present and the future.
This page is the ideal place to stay on top of your tax obligations in the country.
Monthly
Between 7th-16th day of the month following the end of the tax period
VAT rates
18%
10%
0%
VAT rules in Peru
There are multiple tax-related mandates businesses operating in Peru need to be aware of, including:
Peru e-invoicing
Peru is deep into its electronic invoicing journey, with an e-invoicing mandate in place for all taxpayers. The activity is regulated by the Electronic Issuance System and includes more electronic documents than just electronic invoices.
There are multiple electronic issuance systems in Peru that help generate electronic payment receipts. These systems can be public, commercial or private.
The main SEE systems are:
SOL issuance system: Mainly for small taxpayers and independent professionals to produce electronic receipts
Issuance system from the taxpayer’s systems: Made according to the taxpayer’s measures and needs to issue electronic receipts.
SUNAT billing issuance system: For issuing electronic receipts
Electronic services operator issuance system: The process of validating the CPEs generated by the taxpayer’s issuance systems requires entities authorised by SUNAT to electronically verify CPEs to be considered issued
Sovos is an official Operator of Electronic Services in Peru, as well as an Electronic Services Provider (PSE). Find out more about our global e-invoicing compliance solution.
Requirements to register for VAT in Peru
Awareness is key when considering your VAT obligations in Peru. The country has no VAT threshold, meaning businesses must register having provided their first taxable supply.
It also requires non-resident organisations to register for VAT at the point they perform their first taxable activity.
Taxpayers in Peru must register for a ‘Registro Unico de Contribuyente’, a unique identification that covers VAT but also other taxes. The required documents include:
Form 2119
Evidence of incorporation
The company’s Public Registry documentation
Peru will enforce a new VAT rule from 1 December 2024. Non-resident providers of digital services will be required to register for VAT at 18% when providing digital services to consumers in Peru.
Invoicing requirements in Peru
Peru introduced e-invoicing in 2010, though it became compulsory in the country years later. Taxpayers must issue and receive electronic invoices, and meet certain requirements along the way:
Recipients must generate an acknowledge of receipt for received e-invoices
Electronic invoices must be issued for both B2B and B2G transactions
The invoices themselves have stringent rules – such as needing to be in UBL 2.1 format and archived for at least five years – and require information such as:
Invoice data and reference number
Supplier name, address, contact details, tax ID
Description of goods and/or services (quantity, price, unit of measure)
Failing to meet VAT obligations in Peru may lead to penalties.
For example, failing to declare taxable sales can result in a fine that amounts to 50% of the VAT amount that is due – plus monthly interest of 1.2%. There are other reasons in which a taxpayer may be penalised, so compliance is vital.
There are certain supplies in Peru that are eligible for withholding VAT, of 4%, 10% or 12%. Taxpayers are required to split the withheld VAT and remit it to a special account with the nation’s bank.
Yes, non-residents who have purchased and consumed goods or services subject to authorised VAT in Peru can file requests to recover VAT. It will be refunded at the time of the non-residents’ departure.
Businesses looking to register for VAT in Peru must submit specific documents through a local fiscal representative that is registered with the country’s tax authorities.
Registered businesses in Peru must obtain a unique tax identification number, known as ‘Registro Unico de Contribuyente’. This number is necessary for VAT but also applies to other taxes.
Peru dictates that VAT is due at the time of the goods or services having been supplied.
Solutions for VAT compliance in Peru
Compliance can be tough when considering there are multiple mandates that may apply, and that rules and regulations evolve over time. Ensuring you meet standards and are current on the state of play can feel like a full-time job.
This is where Sovos shines. We serve as the compliance partner for many organisations, staying on top of the tall task of compliance so they can focus on what truly matters: growing their business. Our one-of-a-kind solutions are matched by our expert team’s local and global tax knowledge, providing true confidence for a regulated world.
Speak to our experts today to start a new chapter in your compliance journey
From managing VAT compliance to familiarising yourself with the VAT registration timelines, Alex Smith, Senior Director of Consulting Services will detail the most critical compliance challenges for companies expanding internationally.
