Based on the timelines above, ViDA will be rolled out starting 2025 to 2028. Some questions that arise regarding how the new proposal will affect your business include the following:
There Will Be New Technology Demands for Businesses
To meet reporting obligations, businesses must implement new technology to handle ViDA's protocols, document exchange, and authentication.
In addition, they'll need to evaluate ViDA's impact on Continuous Transaction Controls (CTC) models.
Many businesses in the EU use multiple ERPs, accounts payable, and billing systems for different needs.
Most of these systems process invoice data on PDF or paper that cannot be easily upgraded to handle the quality and data completeness requirements of strict electronic invoicing and e-reporting.
ViDA, therefore, means businesses will need to modify their systems. Besides upgrading their infrastructure, other changes may include
- Removing the taxpayer's ability to use summary invoices
- Introduce several mandatory fields on invoices
- Redefine what makes an invoice
VAT in the digital age may also mean converting the massive number of PDF invoices in the EU to machine-readable formats.
Further, EU businesses must meet the growing mandatory B2G e-invoicing requirements in most member states and the imminent electronic invoicing in the B2B sphere.
Overall, this implies that EU businesses must partner with service providers like Unimaze to guarantee compliance with the laws and frameworks. Simply ViDA means businesses in the EU will need to overhaul or rethink their invoicing processes and systems.
Certain Business Processes Will Be Impacted
VAT in the digital age will impact all invoicing and related processes. These include accounts receivable and accounts payable processes as well as the IT infrastructure required to support them.
EU businesses must be ready for the digitization paradigm shift that ViDA will introduce.
Businesses Will Need to Reevaluate their Current Technology Partnerships
Businesses that use EDI systems, accounts payable automation, procure-to-pay, order-to-cash, customer communication management, payment solutions, and e-billing must consider how their platform can adapt to ViDA’s e-invoicing and e-reporting requirements.
And because these systems aren’t built to anticipate changes such as the one ViDA will introduce, it’d be best to contact a reliable service provider to help ensure your systems are compliant when the new regulations kick in.
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