Mandatory e-invoicing For Cross-Border Trade .Last month the European Union published the VAT in the Digital Age directive that will pave the way for mandatory e-invoicing for cross-border trade within the single market from 2025.“Europe is pressing the accelerator on digitalisation, overhauling legacy tax and finance processes and compliance requirements to create frictionless cross-border commerce for those trading in and out of the EU,” said Avalara senior director of indirect tax Alex Baulf.The initiative is set to affect more than 20 million businesses across Europe, putting digital billing and reporting processes in place for approx. 550 billion transactions a year, and establishing a digital marketplace of more than 320 million consumers.Whilst e-invoicing will be mandatory for cross-border transactions from 2025, EU digital reporting will not start until 2028, and will allow for member states to implement similar processes internally. So how will it work?EC sales lists will be replaced by the new digital reporting requirement. Intra-EU sales will be transacted with real-time digital e-invoicing from the beginning of 2025. Sales information will be passed to taxpayers’ national tax authority based on data extracted from the e-invoices they issue and receive. Transaction data will be submitted to a new central database operated by the European Commission.Digital e-invoicing will improve compliance and accuracy by ensuring all data is matched instantly by computers across the EU. It will allow for a clamp down on carousel fraud where cross-border deals are a big drain on VAT revenue. This centralised database also gives tax authorities access to detailed, updated economic data to better model the impact of fiscal and monetary policy interventions.Whilst the introduction of e-invoicing removes barriers to trade within the EU, it does present hurdles to suppliers from non-EU jurisdictions, depending on the organisation’s supply chain and fulfilment structure. Others may face similar issues as they were previously facing, due to things such as currency exchange and needing to rely on software solutions to deal with these complexities. Get More Business Blogs Like This Like Us On Facebook | Follow Us On Twitter | Follow Us On LinkedIn Accountancy FirmAccountant LiverpoolBusiness Supportcross border tradee-invocingLiverpool BookkeeperLiverpool Xero AccountantPayroll AccountantXero Accounting UKXero Certified AccountantXero Integrated Apps Previous Post2023 Benefit & Pay RatesNext PostThe Spring Budget 2023 Breakdown