E-invoicing presents both challenges and opportunities for your company. While transitioning from traditional paper-based invoicing to electronic formats involves hurdles such as compliance complexities, data quality issues, and technological adaptation, it also offers the potential for streamlined processes, cost efficiencies, and enhanced accuracy. Additionally, it creates an unavoidable regulatory obligation to initiate essential finance and business transformation efforts.

Embracing e-invoicing can lead to improved efficiency, reduced errors, and better financial management, marking a significant shift in modern business transactions. Below, we outline the critical challenges and opportunities that e-invoicing presents in today’s dynamic landscape.

Invoicing is a critical business process, and the digital trend of “fiscalisation” of e-invoices introduces both compliance challenges and transformation opportunities that require your attention. This shift will lay the foundation for a more strategic, data-driven approach to tax function and management.

To successfully navigate the digital tax landscape, businesses must understand tax rules and guidelines, analyse their impact on data, systems, and processes, explore solution options, and define a strategy to address challenges, including budget and resource allocation. We assert that tax compliance will be unattainable without automation, and any automation effort, such as cloud migration, cannot overlook digital tax compliance.

This transformation demands that tax-related requirements be integrated into all financial systems and business processes, significantly impacting ERP setups and IT infrastructure. Companies must reassess resource deployment and establish digital controls and processes for gap analysis. Furthermore, data quality must improve to meet tax authority requirements, placing new demands not only on the tax department but on the entire organisation.

Digitalisation significantly impacts businesses, offering both disruption and opportunity. For instance, the hotel industry has transformed through online booking, and retail has evolved with e-commerce. A piecemeal, country-by-country approach to digitalisation is inadequate; instead, Dutch multinationals should adopt the mantra: "Act Global, Think Digital."

Act Global

Companies can no longer rely on local fixes as the digitalisation of indirect tax demands a new mindset. Dutch businesses must proactively address tax regulatory changes that are already emerging globally and will soon affect the Netherlands. As tax authorities enhance cross-border cooperation, central governance of tax processes becomes essential. Compliance with e-invoicing and e-reporting should not solely be the responsibility of local finance teams; a global perspective allows for efficiency, cost savings, and standardisation. E-reporting and e-invoicing should encourage companies to optimise their ERP systems and consider upgrades.

While global standardisation in e-reporting and e-invoicing rules remains uncertain, companies should examine indirect tax schemes across all jurisdictions, seeking broadly applicable solutions. Data requirements and structures often share similarities, so selecting a vendor with global expertise can provide competitive advantages. The necessary improvements in data systems for global indirect tax compliance will likely align with solutions for other tax challenges, such as those stemming from pillar two regulations and evolving e-reporting requirements like DAC7 and CESOP.

Think Digital

The tax function has been slow to adopt digitalisation, still relying on paper returns and manual processes. However, as geopolitical pressures and budget constraints rise, the need for digital compliance becomes more pressing. E-reporting and e-invoicing facilitate a networked, digital environment for tax assessment, fundamentally changing how compliance is managed. Gone are the days of cumbersome audits; tax authorities can now access real-time data from taxpayers' ERP systems to identify gaps or anomalies, shifting the burden of proof to the taxpayer.

To adapt, businesses must embrace a digital compliance strategy. Tax data requirements should be integrated into core business processes from the outset, rather than addressed as a later compliance step. Tax-related data entry will need to be embedded within ERP systems, encompassing key areas like digital tax administration, real-time reporting, and transparency. A proactive, automated approach to tax control is essential.

As digital transformation progresses, automated processes will replace traditional returns-based compliance, leading to better data quality and the emergence of digital audits as the norm.

Before commencing your e-invoicing journey, it is essential to reflect on regulatory aspects, the relationship between e-invoicing and e-reporting, global trends, technology choices, strategic approaches, and operational considerations. 

Leveraging our extensive experience in the digital tax landscape, we aim to be your strategic and operational partner on this transformative journey. Our solution-agnostic, scenario-based approach is organised into four comprehensive phases tailored to your company's specific opportunities and challenges related to digital tax obligations. Whether you are formulating a centralised strategy, preparing for go-live, or seeking advanced continuous monitoring, we are here to support you every step of the way.

The choices you have – No one size fits all

There are multiple business led factors that need to be considered in developing a robust deployment strategy. We collaborate with businesses to assess how these key factors align with business's operating models and compliance goals and help them in identifying global strategy.

On 8 December 2022, the European Commission published its proposals related to the VAT in the Digital Age (ViDA) project. This package includes revisions to the VAT Directive, the Regulation on VAT administrative cooperation, and the VAT Implementing Regulation. The proposals encompass numerous detailed changes to the current VAT legislation, set to come into effect at various times between 1 January 2025 and 1 January 2035. On March 11, 2024, the Economic and Financial Affairs Council (ECOFIN) officially adopted the ViDA package. For detailed information on the package, we invite you to visit the landing page VAT in the Digital Age | Deloitte Netherlands.

Key highlights of the proposals, particularly relevant to Pillar One, which focuses on e-invoicing and e-reporting as envisaged under ViDA, include:

• Pillar One: Digital Reporting - This entails digital reporting requirements for intra-EU supplies of goods and services, including transactional and near real-time data transmission from structured electronic invoices.
• Pillar Two: Updated Rules for the Platform Economy - New liabilities for VAT collection will be imposed on platforms facilitating short-term accommodation rentals and passenger transport, as well as on e-commerce marketplaces. This extends the 2021 deemed supplier rule to encompass all marketplace goods transactions.
• Pillar Three: Single VAT Registration - The proposals create new and extended opportunities for businesses trading across borders to report their transactions through a single VAT registration in the EU.

Although the Netherlands currently has no immediate plans for a mandatory e-invoicing regime, many of our multinational clients are already adapting their ERP and billing systems to comply with mandatory e-invoicing and e-reporting requirements in other countries. The trend toward mandatory e-invoicing is spreading rapidly, with neighbouring countries like Germany (phased implementation started this year), Belgium (2026), and France (2026), Poland (2026) planning to introduce such systems. It is evident that the Netherlands cannot afford to lag behind in this growing landscape, considering they will also be confronted with the introduction of Digital Real time Reporting based on mandatory structured e-invoices, which is envisaged under VAT in the Digital Age (ViDA), which will likely be promulgated in March 2025.