E-Invoicing is at a Turning Point: Europe’s Digital VAT Future
Following our earlier look at Singapore’s InvoiceNow initiative and its push for nationwide e-invoicing adoption, we now shift our focus to European Union (EU) where momentum is building under a distinct regulatory and tax environment. Across Europe, e-invoicing is quickly becoming the norm. With the European Commission’s VAT in the Digital Age (ViDA) initiative driving major regulatory changes, the region is taking major steps toward full digital VAT compliance.
Across the EU, e-invoicing is reshaping how businesses manage their financial operations. Built for accuracy and speed, electronic invoices are processed far more efficiently than traditional methods. As ViDA is accelerating the shift to e-invoicing as a regulatory standard, business leaders need to understand what’s driving the change, how it will roll out, and what steps they must take to ensure compliance.
To help make sense of this rapidly evolving landscape, we’re joined by Dr. Bianca Wöhrer, a renowned expert in European tax law and digital compliance. She has a strong academic foundation and over seven years of experience in tax advisory across leading firms. Her knowledge and experience have positioned her at the forefront of the EU’s ongoing efforts to modernise VAT systems. With the legislative package recently finalised in March 2025 and key implementation deadlines set for 2026 and beyond, she is helping businesses navigate this path to compliance. Her work focuses on fostering harmonisation within the EU Single Market, both the large MNCs and SMEs that will be impacted by these sweeping changes.
FH Campus Wien, University of Applied Sciences
(Photo: Dr. Bianca Wöhrer)
In our discussion, she breaks down the upcoming changes and discusses how ViDA is setting the course for mandatory e-invoicing and digital reporting requirements (DRR) across Member States. Her insights shed light on the regulatory drivers behind e-invoicing in the EU, key implementation milestones, common pitfalls, and the broader implications for cross-border operations—particularly between Europe and Asia.
The Role of ViDA in Reshaping E-Invoicing Regulations
According to Dr. Wöhrer, the EU is mandating e-invoicing as part of a broader effort to modernise VAT systems, enhance compliance, and significantly reduce fraud. ViDA was launched to address the estimated €90 billion VAT gap (in 2022). This move aims to improve tax collection, increase transparency, and enable real-time transaction monitoring. The ability to exchange and verify invoices electronically will help reduce fraud and administrative loads, while serving as a key driver in the EU’s broader move toward digital tax compliance. It promotes a consistent approach to e-invoicing across the EU to enhance tax efficiency. For businesses, the initiative promises fewer administrative hurdles by introducing standardised e-invoicing across the EU.
Dr. Wöhrer highlights that the EU’s e-invoicing framework builds on a 2014 directive, which required public administrations to process electronic invoices compliant with a European standard (EN 16931). ViDA expands this by mandating e-invoicing for intra-community B2B transactions starting in July 2030. The initiative also introduces standardised reporting rules (DRR) across the EU. At the same time, Member States are allowed to roll out their own digital reporting systems for domestic trade, provided they comply with European e-invoicing standard.
Mark Your Calendar: What Businesses Need to Know and When to Act
Dr. Wöhrer also pointed out how some Member States are already leading the way: Italy introduced mandatory e-invoicing as early as 2019. France is set to require all businesses to receive e-invoices by September 1, 2026, with large and medium-sized companies also required to issue e-invoices from that date. Smaller enterprises have a grace period and must comply by September 1, 2027. Belgium will follow with mandatory e-invoicing for domestic transactions starting January 1, 2026, followed by domestic reporting requirements by 2028.
Beyond these examples, numerous other Member States are preparing for domestic rollout in the coming years: Croatia and Poland plan to implement e-invoicing by 2026, while Slovakia, Slovenia, and Latvia are expected to follow by January 2027. This wave of mandates signals a major shift from the pre-ViDA era, where e-invoicing was largely subject to approval by the invoice recipient and thus limited, to a future where electronic invoicing will be an essential and regulated part of doing business across Europe.
Legal and Technical Steps for E-Invoicing Compliance
As more EU countries adopt mandatory e-invoicing, businesses must prepare carefully to meet both legal and technical requirements. From a technical standpoint, invoices must be issued in a structured electronic format that complies with the European standard EN 16931. This standard supports two syntaxes—UBL and CII—which in turn correspond to widely used e-invoicing formats such as PEPPOL, UBL 2.1, and UN/CEFACT CII. These formats ensure consistency and interoperability across different systems and Member States.
However, certain technical details remain in development. For example, the exact transmission routes for B2B intra-community invoices and digital reporting are still being tested through pilots based on the established PEPPOL network. These pilots aim to clarify how invoices and reporting data will be exchanged efficiently and securely across borders.
From a legal standpoint, timely issuance and reporting of invoices are critical. Invoices must be issued within 10 days of supplying goods or services and a subset of invoice data must be reported immediately once issued. Business recipients also have reporting obligations, generally required to report also a subset of data of the received invoices within 5 days of receipt. While Member States can opt out of imposing this reporting duty on recipients, most are expected to require it, expanding compliance responsibilities beyond just invoice senders. Dr. Wöhrer emphasises that understanding these timelines and standards is essential for businesses to stay compliant as the EU moves toward full digital invoicing.
What Could Go Wrong? Common Pitfalls to Avoid During Implementation
Dr. Wöhrer shared that one of the biggest pitfalls in e-invoicing adoption is inadequate planning. Failing to thoroughly assess existing invoicing processes and identify areas for improvement can significantly slow down the transition. Furthermore, failing to engage key departments and external partners early on can result in misalignment and internal resistance. This can lead to obstacles beyond just legal compliance.
From her experience, many businesses also underestimate the importance of employee training. Staff need proper guidance to adapt smoothly to new systems and workflows. To avoid these challenges, Dr. Wöhrer advises businesses to conduct a comprehensive assessment of their current invoicing setup and engage stakeholders across the relevant departments such as finance, IT, and compliance teams from the outset. She also stresses the value of partnering with experienced solution providers who bring deep expertise in both regional and cross-border requirements, ensuring compliance and interoperability.
Most importantly, she encourages fostering a culture of continuous learning and flexibility within organisations. This mindset is essential to successfully navigate the evolving landscape of invoicing mandates and digital tax regulations. Preparing early and strengthening internal capabilities will position businesses for success as e-invoicing becomes the norm.
Where B2C Fits in the EU’s E-Invoicing Landscape
While the ViDA initiative focuses primarily on B2B transactions, B2C transactions remain out of scope for both e-invoicing and digital reporting requirements at the EU level. However, as Dr. Wöhrer explains, individual Member States are free to introduce domestic B2C e-invoicing mandates, and several are already doing so. Italy, for instance, has implemented B2C e-invoicing requirements domestically, and other countries—such as France and Germany—are also exploring ways to extend e-invoicing capabilities to the consumer space.
This creates a fragmented environment where up to 27 Member States can independently decide whether to mandate e-invoicing for domestic B2C transactions. For businesses operating across borders, this variability could add another layer of complexity to compliance and system integration. While ViDA does not govern B2C invoicing, the landscape is evolving rapidly at the national level. Businesses should stay informed of country-specific developments and consider flexible solutions that support both structured and hybrid formats.
Cross-Border Challenges: E-Invoicing Beyond EU Borders
Navigating e-invoicing across borders, especially between Europe and Asia, presents significant challenges. Unlike the EU, which is working toward a unified framework under ViDA, Asia lacks a single, harmonised invoicing standard. This could result in diverse and conflicting requirements across countries, making technical integration complex and costly for businesses operating in multiple regions.
However, there are promising developments that can help bridge these gaps. One key opportunity lies in the growing adoption of the PEPPOL framework, which facilitates standardised e-invoicing and promotes interoperability. Countries like Singapore and Japan have already embraced PEPPOL, enabling smoother cross-border invoicing not only within Asia but also between Asia and Europe. This shared infrastructure offers a valuable pathway for businesses seeking to streamline compliance and operations across multiple markets, despite the broader lack of regional standardisation. Dr. Wöhrer notes that while challenges remain, leveraging frameworks like PEPPOL can ease technical hurdles and support global trade in the evolving digital tax landscape.
Looking Ahead: What’s Next For E-Invoicing in Europe?
The e-invoicing landscape in Europe is set to evolve further, with a growing emphasis on real-time reporting and deeper integration with other digital technologies and even further reporting requirements such as reusing invoice data for other purposes such as plastic packaging, CO2 emission data, Digital Product Passport or eFTI Regulation. As implementation of ViDA continues, the rollout of standardised data packages across the EU will play a key role in simplifying invoicing processes, supporting cross-border trade, and reducing compliance complexity for businesses operating across multiple jurisdictions.
Dr. Wöhrer highlights that while these developments will ultimately create a more unified and efficient system, businesses must remain proactive. She advises companies to closely monitor regulatory updates, as changes are expected to continue through the remainder of the decade. Investing in scalable, adaptable e-invoicing solutions now can help businesses stay agile as new rules and technologies emerge. She encourages businesses to engage with industry forums and working groups—not only to stay informed, but to contribute insights that could help shape the future of invoicing policy and implementation. She notes that participating in these conversations is especially valuable as e-invoicing frameworks continue to take shape both within the EU and beyond its borders.
Conclusion: Now is the Time to Prepare
Around the world, countries are moving toward unified digital invoicing frameworks. With the EU leading the charge through the ViDA initiative, and countries across Asia also moving toward digital invoicing systems, it’s clear that the future of invoicing is digital. To avoid disruption, businesses should treat e-invoicing as a strategic priority today. Businesses will need to navigate new requirements around structured invoice formats, real-time reporting, and harmonised standards. Compliance will also require adapting to country-specific mandates and timelines, while avoiding common pitfalls such as inadequate planning, lack of internal alignment, and insufficient training. Expert insights from Dr. Wöhrer have underscored the importance of early preparation, cross-functional coordination, and continuous learning—especially for businesses operating across multiple markets. As global momentum builds, businesses that act now — by investing in scalable solutions, engaging with regulatory discussions, and building internal readiness—will be able to thrive in this evolving digital tax landscape.
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