Belgian finance minister announces structured e-invoicing and expresses support for EU ViDA proposal
Background
The European Commission's ViDA proposal aims to prepare VAT rules for the digital age. It is a comprehensive package of measures that will significantly modify VAT legislation on various fronts. The legislative changes concern amendments to the EU VAT Directive (2006/112/EC), the implementing regulation (EU 282/2011), and the Council Regulation on administrative cooperation (EU 904/2010).
The main objectives of the ViDA proposal are to make the VAT system more fraud-resistant and business-friendly.
To achieve these objectives, the proposal focuses on three pillars.
Firstly, the ViDA proposal aims to modernize VAT reporting by introducing new digital reporting obligations. The aim is to achieve standardized transactional e-reporting at the EU level.
Secondly, the challenges of the platform economy are addressed by updating the VAT rules and obliging platforms to collect VAT on the rental of short-term accommodation, passenger transport services, and delivery of goods in even more cases.
Finally, to prevent the need for multiple VAT registrations within the EU, the proposal seeks to work towards a single EU VAT registration. This is to be achieved, among other things, by expanding the use of existing OSS and IOSS schemes and by introducing a mandatory reverse charge mechanism for foreign suppliers and service providers.
Digital reporting requirements
Key aspects of the ViDA proposal on digital reporting include:
Reply of the Minister
In response to MP Arens' concerns about potential costs for small businesses and security issues with sensitive commercial data on tax administration servers, the Minister emphasized the benefits of electronic invoicing. Many EU Member States are adopting this approach, which has improved taxpayer compliance, tax administration efficiency and effectiveness, and reduced the VAT gap.
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The Minister pointed out that the obligation to issue structured electronic invoices is not new, as it exists in the context of public procurement. A study performed by the Administrative Simplification Agency reveals that transitioning to structured electronic invoices, despite initial costs, brings significant long-term benefits for businesses, such as cost savings and reduced errors due to automation.
This obligation is linked to the transition towards more efficient electronic reporting systems based on these invoices, allowing tax administrations to access more accurate and detailed information quickly. The Minister believes that both businesses and citizens will benefit from this transition and fully supports the European Commission's proposal, despite potential changes during negotiations.
Apart from ViDA and as part of efforts to reduce the VAT gap, the Minister confirmed that his administration and policy unit are preparing a draft law to mandate structured electronic invoices between taxpayers and establish a national electronic reporting system. This system will replace the existing annual customer listing.
Earlier plans in Belgium focused solely on e-invoicing in the B2B context, but the EU Commission demanded the inclusion of an e-reporting component in the approval process, which required the plans to be revised.
Draft legislation
According to the draft bills that are circulating, the following ambitious phased schedule is being considered for mandatory (B2) structured electronic invoicing:
It is expected that taxpayers established in Belgium must be able to receive structured electronic invoices in the format in which they were issued from 1 January 2024. However, they still have the option (until 1 July 2024) to refuse these electronic invoices.
Structured electronic invoices will apply only to taxpayers established in Belgium. They can be issued by the supplier themselves, by a third party (on behalf and for the account of the supplier), or by the recipient in the context of self-billing.
Furthermore, the electronic invoice must be issued according to the PEPPOL BIS format and sent via the PEPPOL network. Deviations are allowed if both parties agree, but then the invoices must still comply with the European standard norm.
The mandatory e-reporting will only come into effect from January 1st, 2026 (six months after the obligation to issue structured electronic invoices has become effective). As previously mentioned, this system would replace the existing annual customer list. Currently, there is little further information available, but it is expected that the Belgian e-reporting measures will be in line with the ViDA proposal.
At present, discussions with stakeholders are still ongoing, so the above timing is not yet set in stone. However, what is certain is that mandatory electronic invoicing and reporting is on the horizon. Although the exact deadlines still need to be confirmed, it is essential for taxpayers to prepare and take the necessary measures in time.?