With the agreement of the ViDA package at the ECOFIN meeting on November 5th, 2024, and a starting date in 2030, Europe can now begin implementing e-invoicing and e-reporting, moving from local mandates in individual countries to a unified, cross-border approach. This shift brings both challenges and opportunities for businesses. Five years may seem like a long time, but a lot of work is required to be fully prepared by 2030. We’ve covered what’s in the ViDA package, so let’s dive into the work that needs to be done, how businesses can prepare, and what opportunities come with this change.
VAT in the Digital Age: A short recap
The main driver behind ViDA is the growing need for a unified, modern, and fraud-resistant VAT system that aligns with the EU’s goals for a digital single market. By closing VAT gaps through greater transparency and standardizing VAT processes, ViDA simplifies compliance for European companies and reduces the complexity of cross-border transactions. This unified approach will make it easier for companies to conduct business across EU borders, encouraging both innovation and modernization in digital trade.
With the package’s approval, we expect the shift to e-invoicing and e-reporting to gain traction, especially since it will now be a cross-border mandate. Some countries have postponed or disregarded their timelines for introducing e-invoicing, and they’ll now have limited time to act accordingly.
Challenges faced by early adopters
Early adopters of e-invoicing encountered unexpected challenges, including evolving regulatory standards requiring frequent system adjustments, technical issues integrating e-invoicing into existing systems, and scalability limitations as transaction volumes grew. New data privacy laws, like GDPR, also demanded stricter data handling measures. These challenges required early adopters to continually adapt and refine their systems to meet changing standards and compliance requirements.
Currently, there’s a gap, or chasm, between early adopters and the early majority. The approval of the ViDA package will likely close this gap, leading to rapid adoption of e-invoicing and e-reporting and prompting a strategic shift. The Billentis report The Global e-Invoicing and Tax Compliance Report: Watch the Tornado explains this in Chapter 3.
Opportunities for Service Providers
As demand rises, service providers have a chance to respond with solutions that ensure compliance and future-proof readiness. According to the same report, Integrated Digital Trade is also undergoing a shift, covering solutions like Invoice Finance, Payment, and Procurement. The report projects two main paths:
- SMEs are expected to adopt Embedded Finance solutions, integrating financial products into daily digital interactions such as digital wallets and e-commerce platforms.
- Enterprises are steering toward supply chain automation, integrating e-invoicing within accounting, ERP, and procurement systems. This promises savings beyond financial processes alone.
Ultimately, most companies—large or small—will adopt Integrated Digital Trade, if only to ensure compliance. The ViDA timeline will likely accelerate this process, pushing to meet requirements before the deadline at the end of 2029.
We advise adopting e-invoicing into your processes sooner rather than later. Whether you’re focusing on e-invoicing, AP or AR processes, or procurement, our experts are here to help you through this transformation.
