Concerns Raised at VAT Expert Group Meeting on E-Invoicing Standardisation Across the EU

Key Issues Identified:

During a recent meeting of the VAT Expert Group, several members voiced concerns regarding the lack of standardisation in e-invoicing models across EU Member States. Specific complaints were raised about the complexity of using Peppol and the divergent national requirements being implemented, which many believe exceed the scope of the VAT in the Digital Age (ViDA) initiative.
Participants emphasised the urgent need for the European Commission to publish the update of the European Standard. Additionally, questions were raised about the potential use of EDIFACT within the ViDA framework.

In response, the Commission clarified the following:
• while ViDA aims to harmonise certain aspects of e-invoicing, Member States retain flexibility in its implementation.
• in relation to Peppol, ViDA could not provide for a concrete way for the transmission of invoices but opted to give freedom to both tax administration and the market to provide solution for it ; and
• that EDIFACT is not currently foreseen as part of the EU standard under ViDA and may only be used domestically.

Does ViDA Provide Certainty for Businesses?
In practice, ViDA has not delivered the level of certainty businesses had hoped for. Many Member States had already begun developing their own e-invoicing systems when ViDA was at its infancy, and since its adoption, some have continued to implement divergent models with several more coming before the implementation of ViDA. As a result, rather than a single unified system, businesses now face a fragmented landscape of varying standards, formats, portals, and deadlines.

This raises significant concerns about the interoperability of these systems, particularly for cross-border transactions where suppliers and customers operate under different national e-invoicing regimes.

Impact on Businesses:
What was intended to be a simplification of VAT compliance has, in many cases, led to increased complexity and cost. The lack of harmonisation makes it more difficult for businesses to operate across borders, especially small and medium-sized enterprises (SMEs), who often lack the internal resources and capital required to adapt to multiple systems.
Moreover, the risk of non-compliance has grown, placing an additional burden on businesses and undermining one of ViDA’s core objectives: to streamline, standardise and simplify VAT processes across the EU.