What is e-reporting?
Today, e-reporting appears under various names:
- VAT reporting;
- VAT listing;
- Real Time Reporting…
This practice involves transmitting certain information to tax authorities about business operations in real-time or near real-time. It concerns structured data, either from invoices or complementary to invoices. This may include:
- Data related to cross-border transactions;
- Sales between professionals;
- Payments and tax;
- Contracts;
- Suppliers…
In other words, all information specific to procurement and finance.
E-invoicing and e-reporting are two tax obligations that typically go hand in hand. For tax authorities, combining these two digitalisation approaches allows them to reconstruct companies’ overall economic activity.
As you’ll understand, e-invoicing and e-reporting aim to enhance transparency in commercial operations and thus combat tax fraud. This represents a key step both in countries’ tax modernisation and in any company’s digital transformation.
To embrace these new regulatory requirements, companies must get organised. This involves understanding current rules in each country and analysing the impacts on data management, systems, and processes within their own company. This is how they can define a coherent strategy to meet this challenge while choosing the most suitable IT solution.
Current state of e-reporting in Europe
An increasing number of countries are mandating the use of e-invoicing and e-reporting systems. This new reality presents a regulatory challenge for many companies, particularly those operating internationally who must adapt to different legislations.
Indeed, each country has its own rules for data transmission: Nature, format, timeline, liable companies… As Christophe Viry, Marketing and Product Director at Generix Group, points out regarding e-reporting: "Today, it’s quite poorly harmonised. From one country to another, you’re asked for different information, not necessarily at the same rhythm, at the same level of aggregation… In some countries like Spain, requirements differ by region."
Today, e-reporting is a widely adopted practice within the European Union. About fifteen countries have implemented it: Romania, Croatia, Bulgaria, Hungary, Norway, the Netherlands, the Czech Republic, Slovakia, Greece with myData, Spain with SII and TBAI, Italy with SDI Esterometro, Portugal with SAF-T, Lithuania with iSAF-T, Poland with JPK V 7K… And soon France with its new reform.
In the near future, the ViDA directive (VAT In Digital Age) should accelerate things. This will particularly modernise VAT (Value Added Tax) reporting obligations. From 1st January 2028, this will include mandatory e-reporting for all intra-community exchanges, meaning all goods sales between VAT-liable professionals within the European Union.
Hungarian Finance Minister Mihály Varga comments: "After nearly two years of negotiations, the Council has reached an agreement on the VAT package. This is a cornerstone of the digital transition and an important step towards improving EU competitiveness. The new rules will update our VAT systems to account for the digitalisation of our economies, help combat VAT fraud, and ease administrative burdens for small businesses and individual service providers."
The benefits of e-invoicing and e-reporting
The obligation for e-invoicing and e-reporting offers certain advantages for businesses. It paves the way for digitalisation and rationalisation of procurement, financial, and administrative processes within the company.
Accelerating digital transformation
First, electronic invoices and e-reporting encourage companies’ digital transformation. This system incentivises them to adopt digitalisation and automation solutions for their transactions, invoices, and tax declarations.
Improving operational efficiency
Companies can now automate manual tasks, eliminate human error risks, and reduce processing times. This translates into efficiency gains and, thus, lower administrative costs.
Enhancing transparency
Increased visibility of invoicing data helps improve stakeholder relationships, both with customers and suppliers. This results in better communication with them and faster dispute resolution.
Reducing carbon footprint
This approach also aligns with companies’ sustainable development strategy. Electronic transmission of invoices and reporting helps reduce greenhouse gas emissions related to paper consumption and physical document shipping.
Reducing risks
Moreover, electronic invoicing and e-reporting help companies ensure compliance. They more effectively meet regulatory requirements; this helps them avoid potential penalties and improves the organisation’s reputation with authorities.
Making strategic decisions
Lastly, this approach allows companies to obtain valuable information about their expenditure. Combined with analysis tools, they can identify savings opportunities and make better financial decisions.
Worldwide, digitalisation is accelerating, and tax data collection is intensifying. This concerns more and more processes and data of different natures, at an ever-increasing frequency. To address this, it requires a true transformation process whose success relies on technology, strategic approach, and operational considerations.
While this implementation presents its share of challenges for any company, it also brings advantages. E-invoicing, combined with e-reporting, remains an excellent way to rationalise processes, gain accuracy, and make informed strategic decisions.
