What is being proposed?
The preliminary draft law provides for a system under which both the supplier or service provider and the customer will have to report certain mandatory invoice data electronically to the authorities.
The new system is intended to:
- give the VAT authorities faster access to more detailed and reliable invoice and transaction data;
- improve the quality and digitalisation of data flows;
- enable more targeted VAT audits and risk analyses;
- support faster action against specific types of fraud;
- abolish the annual customer listing for taxable persons falling within the scope of the new reporting obligation.
What does this mean for businesses?
The VAT authorities will be able to compare invoice data with accounting records and periodic VAT returns much more quickly. Errors in VAT codes, master data, invoice data or the conversion of data into the Peppol format will therefore become visible sooner.
Businesses should therefore already review whether:
- their Peppol solution has been implemented correctly;
- invoice data is processed fully and correctly in the ERP or accounting system;
- VAT codes and master data, such as VAT numbers and customer and supplier data, are configured correctly;
- invoices, accounting records and VAT returns are properly reconciled;
- clear controls are in place for invoices that are technically or substantively rejected, as well as for corrected and duplicate invoices;
- data from the ERP or accounting system is converted correctly into the Peppol format.
This is not merely an IT exercise. Finance and tax teams will also need to be closely involved in the preparation.
Current status
The rules are not yet final. The preliminary draft law will first be submitted to the Data Protection Authority and the Council of State for advice and must then go through the remainder of the legislative process.
The following elements, among others, still need to be confirmed:
- the entry into force date;
- the taxable persons and transactions that will fall within the scope of the rules;
- the exact invoice data to be reported;
- the reporting deadlines;
- the technical requirements and practical implementation;
- the procedure for corrections and any penalties.
VAT Consult is closely monitoring the further legislative and technical developments and will keep you informed as soon as additional information becomes available.
Should you have any questions about the potential impact on your organisation or your current Peppol implementation, please feel free to contact us.