Digital transformation of tax systems is becoming a reality across many European countries. According to European Commission estimates, full adoption of electronic invoicing could generate up to €111 billion in additional VAT revenue for EU Member States by closing VAT gaps. It therefore comes as no surprise that governments are accelerating tax digitalisation, albeit at different speeds. For tax leaders in large organisations this means rapid compliance work, investment in technology and development of new digital skills within their teams. In this article we deliberately look beyond the Polish tax authority and examine how other European administrations are moving online.
Mandatory e‑invoicing and e‑reporting in selected EU countries constitute one of the main pillars of tax digitalisation. The objective is to tighten VAT controls and simplify compliance by replacing paper documents with structured e‑invoices that flow through central platforms. Although the EU seeks to harmonise these processes under the “VAT in the Digital Age” (ViDA) package—which, among other things, foresees compulsory e‑invoicing for all B2B transactions—each country is implementing the reforms at its own pace. Below we provide an overview of the current rules in key jurisdictions.
Italy
Italy was the first EU country to mandate e‑invoicing. B2G e‑invoices became compulsory in 2014, followed by a blanket obligation for B2B and B2C transactions from 1 January 2019. The central Sistema di Interscambio (SDI) accepts only XML invoices in the FatturaPA schema approved by Agenzia delle Entrate; documents issued outside SDI are invalid. Since July 2022 non‑resident businesses operating in Italy have also been required to use SDI. The model has proved effective: VAT fraud is estimated to have fallen by roughly 15.8 % and more than two billion e‑invoices were processed during the first 15 months of operation.
France
France made e‑invoices mandatory in the public sector (B2G) back in 2017 via the Chorus Pro platform. For B2B transactions a hybrid model is being prepared, but implementation was postponed: from 1 September 2026 large and medium‑sized enterprises will have to issue structured invoices, while small businesses will follow on 1 September 2027. The system will consist of a public portal (PPF) and accredited private platforms (PDPs) that will transmit data to the tax authority (DGFIP). Pilot phases are scheduled for 2024‑25.
Germany
Germany has taken a more cautious approach, partly because of its federal structure. B2G e‑invoicing via a PEPPOL‑based federal portal has been mandatory since 2019, but no nationwide obligation exists yet for B2B transactions. After the ViDA package lifted the EU‑level derogation requirement, Berlin is discussing a phased roll‑out, likely starting no earlier than 2026 (large companies first) with PDFs permitted until the end of 2027.
Spain
Spain has required e‑invoices for public contracts over €5,000 since 2015 and large taxpayers have reported near‑real‑time sales and purchases under the SII system since 2017. The 2022 “Crea y Crece” law introduces mandatory structured B2B invoices; an EU derogation was obtained in 2024. The FACeB2B platform will serve as the backbone of the regime.
E‑invoicing in Europe – status June 2025
What Digitalisation Means Inside a Business
System integration with tax platforms is now a top priority. In Italy companies had to embed XML generation and SDI APIs into their ERPs; in France taxpayers will choose between the PPF and certified PDPs; in Poland larger firms are already adding KSeF modules. Automation manifests itself through automatic VAT returns generation, electronic ledgers for audit and APIs that validate VAT numbers or deliver electronic proof of receipt.
Beyond Reporting – The Rise of AI Skills
The next wave brings AI‑powered analytics. With vast datasets (e‑invoices, SAF‑T files, banking feeds, STIR payments in Poland) revenue bodies are turning to machine learning to detect VAT fraud, risk‑score taxpayers and prioritise audits.
In Short – What the Digital Wave Means for Business
Tax digitalisation in Europe is rapid and irreversible. Obligations such as e‑invoicing, near‑real‑time reporting and platform interoperability shift the compliance burden from document handling to data quality, system architecture and team skills. Companies that treat the reforms as an opportunity can lower regulatory risk and gain lasting advantages through smoother operations, better collaboration with authorities and greater process transparency; those clinging to legacy methods face mounting technological, operational and legal pressure.