Recommendations for a successful ViDA implementation

It should be borne in mind that we are in a transition zone between the traditional and the digital world, where remaining manual processes will still lead to problems in reconciling the data of the supplier and the recipient. The EU Commission should therefore develop guidelines on how Member States should collect, use and secure transaction-based data so that honest traders are treated fairly and respectfully. This should be achieved through the following measures:

Digital Real-time Reporting

The EU Commission, in consultation with the business community, should work towards convergence of national systems for e-invoicing and Digital Real-time Reporting, pursuing a limited number of possible approaches. Examples include the Peppol CTC model. EDI has also been established for years and for many companies it is an indispensable part of supply chain management.

Procedure for checking DRR data

Large amounts of data can lead to a large number of enquiries from the tax authorities. This can paralyse honest taxpayers on the one hand and help fraudsters to slip through the cracks on the other. It is important to find the right balance here.

In many countries, invoices must be uploaded to a government portal and the right to deduct input VAT only exists if the supplier has done so. This undermines the neutrality of VAT. The tax authorities can also generate a pre-filled VAT return from these portals, together with data from customs declarations and SAF-T, for example. Although this sounds like a simplification, practice shows that it is time-consuming for many taxable persons to reconcile this with the data from their systems. Ways to achieve better, more co-operative compliance with standard business systems should be investigated in more detail.

Data security

The tax authorities must be aware that they are accessing sensitive business data as part of the DRR. If the principles of confidentiality and data protection are violated, this can be devastating for companies. It is therefore crucial that a monitoring mechanism is established at the EU level.

Taxpayer rights/compliance facilitation

For taxpayers, e-invoicing and the DRR require massive investments. It is important that not only the tax authorities but also the taxpayers themselves benefit from this in the form of easier compliance. It is desirable to have a database managed at the EU level as a "single source of truth" that can be used, for example, to identify business partners in every respect relevant to VAT. This includes information on what data business partners have provided about the taxable person.

Consideration should also be given to whether the availability of so much data in real time does not make other burdens, in addition to the recapitulative statement, unnecessary for the taxpayer. This applies, for example, to documentary evidence for cross-border supplies. VAT returns can also be simplified if you consider how much transaction-based data is already available to the tax authorities. Statistical data can also be derived from this, if necessary, without the taxable person being required to submit additional declarations. The levying of import VAT at the border could be abolished by making the reverse charge procedure standard for imports and allowing input VAT deduction for B2B transactions regardless of ownership of the goods.