The EU’s Digital VAT Reform: Preparing for Mandatory E-Invoicing

Why should I read this?

The EU is entering a new era of VAT compliance. Adopted in March 2025, the VAT in the Digital Age (ViDA) package includes three legislative proposals amending the EU VAT Directive. The reform modernises reporting, simplifies compliance and builds a unified digital VAT framework. Together, the new rules will reshape how VAT data is captured and shared, setting common digital compliance standards across the EU.

The shift to mandatory e-invoicing will transform how multinational groups manage tax and financial data. Its impact extends far beyond VAT, influencing finance, procurement and audit processes. Structured invoicing and near-real-time reporting will make data accuracy central to business operations and increase scrutiny from tax authorities.

What should I do?

Although the rollout of the ViDA framework is scheduled progressively for 2028-2030, several Member States have already introduced domestic e-invoicing obligations (see table below). Businesses operating in these jurisdictions may therefore already be affected. As national systems expand ahead of ViDA, companies should begin assessing how their tools and processes will support structured invoicing and near-real-time reporting. Key priorities include:

• map exposure: identify which entities and transaction types will be affected
• review systems: ensure Enterprise Resource Planning (ERP) and finance tools can issue and receive structured invoices using the EN 16931 data standard
• coordinate internally: align tax, finance, IT and legal functions on governance, controls and digital archiving
• engage trading partners: ensure technical compatibility and data consistency across supply chains
• plan phased implementation: design internal pilots to test compliance readiness before EU-wide obligations take effect
• stay informed: further delegated and implementing acts, as well as national guidance under ViDA, are expected during 2026–2027

What else do I need to know?

Understanding the different e-invoicing models

Understanding different models is key to assessing local implementation timelines, system design and compliance risk. Member States are not adopting identical systems, and the model in place has direct implications for IT integration and operational management.

• Continuous Transaction Controls (CTC): invoices are transmitted to or validated by a tax authority before being sent to the buyer. This model gives real-time VAT visibility but requires certified connections or government-approved platforms.
• Peppol-based systems: invoices travel through a secure network of certified access points using the EN 16931 standard. Transactions occur directly between businesses, without prior tax-authority validation.
• Hybrid models: combine Peppol transmission with post-issuance reporting to tax authorities. Often used as a transitional step before full CTC adoption.

ViDA rollout and implementation timelines

The ViDA framework will apply progressively from 2028. Member States will need to align their national systems and adopt common technical standards for e-invoicing and digital reporting. The package consists of three main pillars, each with its own implementation timeline:

• Digital Reporting and e-Invoicing – introduces structured e-invoicing for intra-EU B2B transactions, based on the EU data standard EN 16931. From 1 January 2028, Member States may start applying the new digital reporting rules. From 1 July 2030, all intra-EU B2B invoices must be issued electronically in EN 16931 format within 10 days of the taxable event.
• VAT Rules for Digital Platforms – harmonises VAT treatment for goods and services sold through online marketplaces. Effective from 1 January 2028.
• Single VAT Registration – extends the One-Stop Shop (OSS) and Import OSS, allowing companies to declare and pay VAT through one EU registration. Starts applying in 2028, with full functionality expected by 2032.

E-invoicing rollout by Member State

The table below outlines national e-invoicing systems currently applied to domestic supplies and services within each Member State. These frameworks operate under national derogations from the EU VAT Directive, allowing earlier and voluntary adoption of e-invoicing ahead of ViDA.

Fully implemented systems

Country	System type	Scope	E-invoicing obligation start date	Status / Next step
Italy	CTC (SdI)	B2B / B2G / B2C	2019	Fully operational; serves as reference for EU harmonisation.
Romania	CTC (RO e-Factura)	B2B	July 2024	Fully operational; serves as reference for EU harmonisation.

 

Systems in rollout phase (2025–2027)

Country	System type	Scope	E-invoicing obligation start date	Status / Next step
Germany	Hybrid (EN 16931 + Peppol)	B2B	January 2025	Phased by company size – accept e‑invoices from 2025; mandatory issuance 2027 (large) → 2028 (all).
Belgium	Peppol (EN 16931)	B2B / B2G	January 2026	Full application from 1 January 2026.
Greece	CTC (myDATA / national platform)	B2B	January 2026	Law adopted; rollout scheduled 2026.
Spain	Hybrid (certified software + reporting)	B2B	January 2026	Certified software mandatory 2026; full B2B e‑invoicing 2027–2028.
Poland	CTC (KSeF 2.0)	B2B	February–April 2026	Phased by company size – large 2026; SMEs by 2027.
France	CTC (PPF / PDP network)	B2B	September 2026	Phased by company size – large 2026; SMEs 2027.
Portugal	Hybrid (structured e‑invoicing + reporting)	B2B / B2G	January 2027	Law adopted; full rollout 2027.

 

The following EU countries have not yet adopted national B2B e-invoicing measures ahead of ViDA. They currently apply e-invoicing mainly in public procurement (B2G) or rely on periodic reporting. Alignment with the ViDA framework is expected from 2028 onwards: Austria; Bulgaria; Croatia; Cyprus; Czechia; Denmark; Estonia; Finland; Hungary; Ireland; Latvia; Lithuania; Luxembourg; Malta; Netherlands; Slovakia; Slovenia; Sweden.