On 10 March 2026, the Dutch Ministry of Finance submitted to Parliament a report focusing on how best to implement new value-added tax (VAT) e-invoicing and digital reporting in the Netherlands.

VAT in the Digital Age (ViDA)

The VAT-landscape at the European level is undergoing significant developments in the areas of digitalization and the creation of a future-proof VAT system. In this context, on 5 November 2024 the European Council adopted the "VAT in the Digital Age" (ViDA) Directive. Under this Directive, all European Union (EU) Member States are required to introduce, as from 1 July 2030, digital reporting for cross-border and certain reverse-charged business-to-business (B2B) transactions, as well as electronic invoicing (e-invoicing). (For background, see EY Global Tax Alert, EU has finally reached agreement on VAT in the digital age (ViDA) proposal, dated 5 November 2024.)

The ViDA Directive offers Member States the option to apply the obligations relating to e-invoicing and digital reporting to domestic B2B transactions as well. The Netherlands therefore faces the policy choice of whether these obligations should also apply to domestic B2B transactions, and whether a specific infrastructure (see below) should be prescribed for these obligations.

EY report

Given the policy choices to be made, the Dutch Ministry of Finance asked EY to conduct research into the most desirable Dutch implementation of the ViDA Directive in the area of e-invoicing and digital reporting. This research shows that both the business community and the government have clear preferences, as well as certain conditions, for the implementation of digital reporting and e-invoicing. The resulting report was sent to the Dutch Parliament on 10 March.

This Tax Alert outlines upcoming changes in the field of e-invoicing and digital reporting, the report's conclusions and recommendations to the Ministry of Finance, and finally actions to be taken.

E-invoicing

Sending and receiving e-invoices will become the standard for all transactions as from 1 July 2030, with Member States being permitted to introduce exemptions for domestic transactions.

For these transactions, businesses will be required to issue an e-invoice within 10 days of the taxable event.

Electronic invoices must, in principle, comply with the technical standards established at European level as from 1 July 2030. The baseline requirement is that every e-invoice must follow the EN16931 format. However, EU Member States are authorized to allow other electronic formats.

Digital reporting

E-invoicing and digital reporting are closely connected. The information that must be included on the e-invoice largely corresponds to the data required for reporting. Digital reporting will become mandatory as from 1 July 2030 for cross-border and certain reverse-charged B2B transactions. Both the business performing the supply of goods or services and the business acquiring them will be required to digitally report certain prescribed transaction-level data to the authorities.

The supplying business is required to report in "near real-time," meaning that the transaction data must be transmitted to the authorities at the moment the invoice is, or should have been, issued. The business acquiring the supply must report the data no later than five days after the e-invoice is received. It is not yet entirely clear how the European legislature intends the term "received" to be interpreted. The European Commission is currently preparing so-called "Explanatory Notes," which may provide clarification on this point.

However, Member States also have the option not to impose digital reporting obligations for purchases (the so-called opt-out). In such a case, the Member State must notify the European Commission.

Conclusions from the EY report

Based on interviews with stakeholders, a comparative legal analysis with other countries and a review of the advantages and disadvantages of e-invoicing, the report draws the following conclusions:

• E-invoicing and digital reporting obligations must be broadly implemented, including for domestic transactions.
• The digital reporting obligation for acquisitions has not yet been introduced.
• There should be one standard for e-invoicing (EN16931 standard) and mandatory use of the Peppol network.
• The Netherlands must begin a phased introduction of ViDA, starting from January 2030, with sufficient time between the publication of legislation and the implementation date.
• Clear government information campaigns and guidance will be needed.
• Sufficient attention must be given to legal protection, General Data Protection Regulation (GDPR) requirements and cybersecurity.
• A grace period should follow implementation.

The EY report shows that the above conclusions align with the two objectives of the ViDA Directive: improving tax collection and reducing fraud, as well as simplifying VAT compliance for businesses and tax authorities through the use of technology. Broad implementation of the rules will provide benefits, including:

• Increased efficiency for businesses
• Expected increase in tax revenues
• More efficient supervision by the tax authorities
• Potential facilitation of (partially) pre-completed VAT returns in the future

The report acknowledges that broad implementation of the ViDA rules will result in additional burdens for businesses. Nonetheless, all research on e-invoicing shows that the benefits for businesses outweigh the disadvantages.

The report also notes that the Dutch government should consider excluding certain transactions and businesses from the e-invoicing and e-reporting obligations. Examples include businesses that operate almost exclusively on a business-to-consumer (B2C) basis, as well as certain exempt activities.

The introduction of digital reporting for acquisitions would lead to practical challenges and an increased administrative burden for both businesses and the tax authorities. This is because the number of mismatches, corrections and resulting queries from (foreign) tax authorities is expected to increase, given the short reporting deadline of five days after receipt of the invoice. For this reason, the EY report recommends that the Dutch government consider the opt-out. The Netherlands government may still consider introducing the reporting of purchases at a later stage, once the market has become accustomed to e-invoicing and digital reporting obligations for a longer period, and based on experiences in other EU Member States.

The research shows that building on the existing Peppol network is preferable to imposing an entirely new system. Peppol offers a standard that is interoperable and scalable, has multiple service providers (so-called Access Points or Peppol service providers) thereby ensuring choice and competition, and is widely supported internationally.

The EY report serves as a starting point for the Dutch government in working toward implementing the ViDA rules in Dutch legislation and regulation. It is now a matter of awaiting further announcements from the government on this topic.

How should businesses prepare?

The ViDA changes will have a broad impact on the VAT landscape, likely affecting most businesses. Although ViDA brings significant adjustments, this development also provides businesses with an opportunity to improve their administrative processes. Organizations that anticipate the changes timely can leverage e-invoicing and digital reporting to streamline processes, improve data quality and achieve efficiency gains. Early preparation therefore enhances not only the level of compliance but also the operational benefits.

Implications

Affected businesses should consult with knowledgeable tax advisors and consider, depending on their particular circumstances:

• Mapping the implications of ViDA for the business's invoicing and reporting processes and undertaking structured preparation
• Selecting an appropriate and suitable e-invoicing solution, including deciding how it will be implemented