At the end of last year, the European Union launched proposals (‘VAT in the digital age’) to amend the VAT regulations on important points. The introduction will take place in phases, with the first change planned to take effect as early as 2024.

It is now becoming clear that various EU Member States are having difficulty with the effective date; the European Parliament has recently proposed postponing its implementation by two years.

The most important change concerns the introduction of a mandatory method of invoicing based on a standard ‘e-invoice’. This will initially apply to intra-Community transactions in goods and intra-Community services. All companies in the EU must start working with this digital invoice: whereas an invoice must now be issued no later than the 15th day following the month of the transaction, under the new regime the invoice will be issued within two days after the delivery or service was provided. This digital invoice must also be submitted digitally to the Tax and Customs Administration. The current ICP Statement will expire and be replaced by another form of digital reporting.

A challenging factor is that EU Member States may decide for themselves whether they will also require this new method of invoicing for other transactions. It is also mandatory to state the bank account number (from which the transaction is paid) of the buyer / client on the e-invoice.

All in all, this has a major impact on business: administrative systems must be able to work with the new e-invoice and an invoice must be issued much earlier than is currently the case.

We will keep you informed of developments.