Rethinking VAT Compliance in the era of real-time reporting

As tax authorities move toward e-invoicing and live reporting, traditional VAT processes may no longer be fit for purpose. Rethinking VAT Compliance in the era of real-time reporting

The VAT landscape is undergoing quite a transformation. From 2026, several jurisdictions are expected to introduce forms of mandatory e-invoicing and real-time reporting. In practical terms, this means that tax authorities will begin to have access to invoice data long before the traditional VAT Return is submitted.

Rethinking VAT Compliance in the era of real-time reporting is essential for adapting to these changes.

While the VAT return will remain a required reporting obligation, its role is shifting. Going forward, tax authorities will already hold much of the underlying data before companies complete their internal compliance processes.

The risk with traditional VAT workflows

Despite this shift, many organizations continue to approach VAT compliance as a post-period activity. It’s common for validation and reconciliation of invoice data to begin after the end of the reporting period, just ahead of return submission. For years, this timing made sense. But in a world where authorities already have the data in near real time, it introduces a critical misalignment.

The risks are clear:

• Errors or omissions may be detected by authorities before they are identified internally
• Reconciliation between reported data and submitted returns becomes more complex
• Corrective actions may be delayed, increasing audit exposure and compliance pressure

A more proactive approach

To stay ahead of these changes, companies need to shift their VAT compliance mindset from reactive to preventive. That means bringing validation, reconciliation, and error-checking processes closer to the point of transaction, before data is reported externally. This upstream approach allows businesses to detect inconsistencies early, safeguard data integrity, and avoid surprises when tax authorities review live data.

In this new era of transparency and immediacy, businesses that embrace VAT compliance as a real-time discipline rather than a month-end exercise will not only reduce risk but also gain operational efficiencies and stronger relationships with tax authorities.

Prepare for what’s next

Real-time reporting requires real-time readiness. If your VAT process still starts after the period ends, it may be time to re-evaluate.

Our VAT compliance solution sits within your SAP BTP environment and connects directly to your SAP systems to:

• Extract invoice data daily
• Validate transactions immediately against country specific compliance rules
• Flag missing mandatory data before they cause downstream issues during the filing process
• Allow tax team to take action before reporting deadlines
• Map validated data to the correct VAT declaration, country specific form

By validating continuously, not retroactively, companies can reconcile data proactively and reduce risk as digital tax enforcement becomes the norm.

Get in touch to learn how our SAP BTP-based tool helps ensure ongoing compliance before, during, and after submission.