European Commission Publishes VAT Committee Working Paper No. 1102: Key Changes in e-Invoicing in the EU Under the vat in the digital age (ViDA) Directive

EU VAT Committee Releases New Guidance on e-Invoicing and Digital Reporting Rules

On 11 March 2025, the European Commission’s VAT Committee published Working Paper No. 1102, providing clarifications on the immediate application of new electronic invoicing rules under the VAT in the Digital Age (ViDA) Directive. This paper discusses the impact of amendments to Articles 218 and 232 of the EU VAT Directive (2006/112/EC), which allow EU Member States to enforce mandatory e-invoicing without requiring prior approval from the European Commission.

These changes will apply immediately upon the ViDA Directive’s publication in the Official Journal of the European Union, even though the full digital reporting obligations under the digital age package will only take effect from 1 July 2030.

The working paper provides guidance on the scope of mandatory e-invoicing, the businesses affected, and its relationship with future digital VAT reporting requirements.

Background: Why Is the EU Changing e-Invoicing Rules?

Currently, electronic invoices and paper invoices are treated equally under EU VAT law (Article 218 of the VAT Directive). However, Article 232 required that businesses obtain their customer’s explicit consent before issuing electronic invoices.

This rule created barriers to the widespread adoption of e-invoicing, preventing some EU countries from implementing mandatory e-invoicing unless they received a special exemption (derogation) under Article 395 of the VAT Directive.

Several countries, including Italy, Poland, France, Germany, Romania, and Greece, applied for such derogations to introduce mandatory B2B e-invoicing and real-time digital VAT reporting. The new ViDA rules eliminate this requirement, allowing all EU Member States to introduce e-invoicing immediately. The ViDA package foresees electronic invoicing as the default method for issuing invoices. Paper invoices shall only be used upon authorization from the Member State, which cannot be granted if the transaction is subject to a digital reporting obligation for either domestic or intra-Community transactions (new Article 218(2)).

Key Changes in Articles 218 and 232 within the EU VAT Directive

1. Electronic Invoicing Becomes the Default Method

Under the revised Article 218, electronic invoices will be the default format for VAT invoices. This means that:

• Businesses will no longer need customer consent to issue e-invoices.
• Member States can introduce mandatory e-invoicing without needing prior EU approval.
• Paper invoices will still be allowed, but only under specific conditions set by each EU country.

2. Which Transactions Are Affected?

The new rules allow EU Member States to require electronic invoicing for domestic transactions when the supplier is established in the country. However, certain cross-border transactions are excluded from mandatory e-invoicing, including:

• Intra-Community supplies (sales of goods or services between EU countries).
• Triangular transactions (involving three parties in different EU countries).
• Supplies where the seller is not established in the country of taxation.

This means that while domestic transactions may require e-invoicing, cross-border transactions will follow separate digital reporting rules, which take effect from 1 July 2030.

3. Which Businesses Must Comply with the e-Invoicing Mandate under ViDA?

Only businesses that are established in the country where mandatory e-invoicing is introduced will be subject to the requirement. This means:

• Businesses with a permanent establishment in the country must comply.
• Foreign companies registered for VAT but without a fixed establishment are not affected.

The VAT Directive does not define “establishment”, so the European Commission recommends using the definitions from the VAT Implementing Regulation (EU No 282/2011).

Impact on Digital Reporting and Future VAT Compliance

1. Do e-Invoicing and Digital Reporting Go Together?

One of the key points clarified in the working paper is that mandatory e-invoicing does not automatically mean mandatory digital VAT reporting.

Until 1 July 2030, EU Member States can choose to:

• Implement real-time VAT reporting using electronic invoices.
• Continue using existing VAT reporting systems (e.g., periodic VAT returns).

However, from 1 July 2030, all digital reporting systems must comply with the new EU-wide e-invoicing standard under Articles 271a and 271b of the VAT Directive.

2. e-Invoicing Standards: What Format Will Be Used?

For now, EU countries can choose their own e-invoicing formats. However, from 1 July 2030, all electronic invoices must follow the European Standard on Electronic Invoicing (Directive 2014/55/EU).

This means businesses should start preparing for the transition by adopting e-invoicing solutions that support this EU-compliant standard.

Next Steps: What Should Businesses and Governments Do?

The European Commission has invited EU Member States to provide feedback on:

• The transactions that should be covered by mandatory e-invoicing.
• The definition of establishment for VAT compliance purposes.
• The transition timeline leading up to 2030.

How Businesses Can Prepare for Upcoming e-Invoicing Mandates?

Check your country’s VAT rules to see if mandatory e-invoicing will be introduced.
Invest in e-invoicing software, such as eezi, that supports EU-compliant formats.
Adjust your accounting and reporting processes for future digital reporting requirements.
Monitor updates from national tax authorities on implementation timelines.

By taking early action, businesses can avoid last-minute disruptions and ensure smooth compliance with the new EU VAT rules.

Need help transitioning to electronic invoicing? Consult with VAT experts or your local tax authority for guidance.