Digital VAT Reform Accelerates EInvoicing Across Europe

Electronic invoicing is moving from being an efficiency initiative to becoming a regulatory requirement for European businesses. Authorities across Europe are intensifying the digitalization of tax and reporting processes, and developments clearly point toward mandatory structured e invoicing within the B2B market.

Through the European Commission’s reform package VAT in the Digital Age, ViDA, structured electronic invoicing will become the standard for cross border B2B transactions no later than 2030. The reform aims to reduce VAT fraud, close the so called VAT gap and harmonize digital reporting across member states.

This development is part of a broader international trend. Several European countries, including Italy, France, Poland and Germany, have already introduced or announced phased requirements for B2B e invoicing. At the same time, Continuous Transaction Controls, CTC, are spreading globally.

Regulatory timelines are set

ViDA introduces mandatory structured e invoicing for cross border transactions within the EU, combined with digital reporting requirements. Several member states are also moving toward national mandates aligned with EU standards.

Traditional PDF and paper invoices will no longer be sufficient. Instead, machine readable, structured formats will be required to enable automated validation and more real time reporting. Invoice data is increasingly becoming the foundation for VAT reporting and regulatory compliance.

Focus on reducing the VAT gap

The European Commission has long identified the VAT gap, the difference between expected and actual VAT revenues, as a significant challenge.

Structured e invoicing and digital reporting are intended to increase transparency, reduce fraud and enable earlier detection of discrepancies. Countries that have already implemented clearance or CTC models have reported improved efficiency in tax collection.

Continued cost and efficiency pressure

Alongside regulatory requirements, companies face a growing need to streamline their finance functions.

Structured e-invoicing enables direct system to system transfer without manual data entry. This reduces processing time, error rates and the need for manual reconciliation. For companies handling large invoice volumes, automation is increasingly viewed as both a cost saving measure and a resilience factor.

Increased standardization across borders

Infrastructures such as Peppol play a central role in the development of standardized and secure document exchange.

Peppol was originally developed for the public sector but is now widely used in B2B transactions across several European markets. The network enables standardized formats and adaptation to emerging regulatory requirements.

“We see that ViDA clarifies the need for a common, standardized infrastructure for e invoicing across borders. Peppol is a crucial component in this. For us at Addovation, it is especially rewarding to be able to offer robust Peppol services to Nordic customers, whether they handle very large transaction volumes or smaller flows. Standardization creates predictability, scalability and security in a time of rapid regulatory change,” says Fredrik Wingren, CRO at Addovation.

ERP integration and digital maturity become strategically important

The transition to structured e invoicing requires many companies to upgrade their ERP systems, integration platforms and reporting solutions.

The digitalization of finance and tax functions is increasingly part of broader modernization programs. E invoicing readiness is therefore no longer viewed as an isolated IT project, but as a strategic transformation issue.

Growing need for guidance and deeper insight

As regulations and national implementations continue to evolve, finance and compliance functions are seeking guidance on timelines, technical standards and practical implications.

As part of this, Addovation, an experienced ERP partner focused on long-term customer relationships, is hosting an informative webinar highlighting how Peppol is part of the solution for the EU’s e invoicing requirements, ViDA and cross border business transactions.

The webinar is designed as a knowledge sharing session for those working with the transition to structured digital invoicing.