Real-time reporting and fiscalization in Europe (2023)

Real-time reporting in Europe is a growing trend to improve tax compliance and combat fraud by requiring businesses to issue data to tax authorities as transactions occur.

Every European country has its own VAT reporting requirements. Through this article, gain an overview of the different methods of fiscalization in European countries and satisfy e-reporting compliance.

Real-time reporting

Real-time reporting of e-invoice information refers to the instantaneous transmission and availability of electronic invoice data to relevant stakeholders. It involves the continuous and immediate exchange of invoice details between businesses, tax authorities and other authorized entities.

E-invoicing is the electronic generation, transmission, and receipt of invoices in a structured digital format. Real-time reporting enhances the traditional e-invoicing process by enabling instant visibility and access to invoice information as soon as it is generated or updated. This approach allows tax authorities and other relevant parties to monitor and verify invoice transactions in real-time, improving tax compliance, reducing fraud, and streamlining administrative processes.

Fiscalization

Fiscalization is a process where financial transactions are electronically recorded and validated for taxation purposes. It involves using specific systems or devices to track and report sales, ensuring compliance with tax regulations. By implementing fiscalization, governments can monitor and regulate business transactions more effectively.

Four types of fiscalization

1. Hardware

This type of fiscalization revolves around using fiscal devices ranging from online fiscal printers to online cash registers. It is used in countries such as Italy, Poland and Bulgaria.

2. Software

Point of Sale (POS) software is utilized through this fiscalization method which transmits fiscal data directly to the tax authority or must go through a rigorous certification process. It is used in countries such as Albania, France and Norway.

3. Hardware and software

A combination of both hardware and software-based fiscalization. It is used in countries such as Austria, Slovakia and Germany.

4. Online

A method through which the process of fiscalization is directly carried out on the tax authorities' server, ensuring immediate reporting and validation of the transactions. It is used in countries such as Slovenia, Croatia and Montenegro.

There is the option for a country to not have a fiscalization regime in place, but in 2023 it is fairly rare.

Albania

Implementation timeline:

• 1 January 2021: B2G e-invoices must be submitted in real-time

• 1 July 2021: B2B e-invoices must be submitted in real-time

• 1 September 2021: B2C e-invoices must be submitted in real-time

In 2020, Albania introduced a software-based fiscalization procedure which revolves around real-time reporting between taxpayers and tax authorities through XML messages.

The Albanian Audit System mandates real-time declaration of invoices to the Drejtoria e Përgjithshme e Tatimeve or General Directorate for Tax (DPT). The government has established the Central Information System (CIS) as a centralized invoicing platform to facilitate this process. Invoices are required to be submitted to the CIS for validation. The DPT validates the invoices and assigns a unique code known as the NIVF. Subsequently, the DPT generates PDF invoices containing a QR code that incorporates the NIVF code. Users can download or print these invoices directly from the CIS platform.

Austria

In 2016 Austria introduced the Fiscal Journal (DEP) which has to be stored in real-time at every point of sale (POS) system, a central database or in the Cloud which is then transmitted to the Bundesministerium Finanzen authorities on-demand.

Since 2017, they have also required a digital signature for cash receipts in order to further increase the security of the information. Thus, Austria’s fiscal system can be classified as both hardware and software.

Through the SAF-T system, all companies must submit their tax reporting information digitally on demand.

Belgium

No real-time reporting requirement. July 2024 will begin the gradual rollout of Belgian e-invoicing and near-live reporting which will replace the Annual Customer Listing report. Hardware fiscalization in Belgium currently only affects the restaurant and catering industries which require them to use a Système de Caisse Enregistreuse (ECS) or cash register if their turnover exceeds EUR 25,000.

Bosnia and Herzegovina

The BIH fiscalization is hardware based since 2010. Through their Uprava za Indirektno Oporezivanje Fiscal Law, retail stores must use fiscal devices, create daily reports and print them at the end of daily work hours.

Bulgaria

Through hardware fiscalization following Ordinance H-18 and the usage of fiscal devices, real-time recorded transaction data must be sent to the National Revenue Agency NRA since 2006. The data must be sent through a standardized audit file once per month and each receipt must contain a QR code.

Croatia

Croatia follows the quasi real-time reporting standard for all point-of-sales transactions through certified electronic cash registers. It is one of the first countries to have an online software fiscalization method where transactions are sent in real-time to the Porezna Uprava or Croatian Tax Authority for authorization through a centrally made web service called the e-Porezna portal.

Czech Republic

No real-time reporting requirement. Until 1 January 2023, businesses had to follow the Electronic Records of Sales (EET) system and send sales data to the tax authority, but it has since been repealed.

Denmark

No real-time reporting requirement. Despite that, digital record-keeping will be required for businesses from 1 January 2024, but with possible changes due to the formation of a new government.

A digital register will be required in 4 areas:

1. Cafes, pubs, clubs etc

2. Pizzerias, grill bars, ice cream parlours, etc.

3. Groceries and kiosks

4. Restaurants

Estonia

No real-time reporting requirement. Through the Reporting 3.0 project, Estonia aims to transition to real-time reporting soon.

Finland

There is no real-time reporting requirement, but the Finnish Real Time Economy project is moving towards B2B e-invoicing and real-time reporting in the near future.

France

France’s software fiscalization system was implemented on 1 January 2018 and is deemed to be one of the most complex of its kind in Europe. These software POS systems must be certified and transactions must be signed with a digital signature and saved in real-time.

5 requirements for reporting compliance

1. POS system certification - this can be done through government-certified bodies such as InfoCert or LNE

2. Signing and sequencing of data in real-time

3. Fiscalization of transactions

4. Regular reporting

5. Archiving and backup of transaction data

Germany

Germany implemented the Kassengesetz or Law on the Protection against Manipulation of Digital Basic Records at the end of 2016. It uses a certified Technical Security Element (TSE) which all POS Systems must use starting on 30 September 2020.

3 TSE components

• Security module

• Secured memory

• Digital interface

These components work together to provide a high level of security and reliability of transaction data through a mix of hardware and software fiscalization. With B2B e-invoicing becoming mandatory in 2025, it is also likely that reporting and fiscalization rules will change.

Greece

Greece has implemented hardware fiscalization since 1988 with the AADE’s latest updates to the system in 2020. Businesses must use a fiscal device which must be capable of sending data to the My Digital Accounting and Tax Application or in short the myData tax portal in real-time. The latest legal amendment states that receipts must include a QR code to improve the process.

Starting on 1 January 2024 entities must also declare information such as revenue documents, expense documents and accounting records on the myData portal which they are already familiar with.

Hungary

Real-time e-invoice reporting timeline

• 2018 - All businesses must transmit tax information for domestic B2B sales invoice data in real time through the Real Time Invoice Reporting (RTIR) system

• 2021 - Real-time reporting for B2C invoices

Hungary started to implement fiscalization in 1999 and then later in 2014 implemented the Online Cash Register System in two sectors; retail and hospitality. It then expanded its scope as an advanced system in 2016 to encompass the whole service sector.

Through its Hungarian Tax and Customs Office - NAV certification, hardware fiscalization consists of both a fiscal device and a POS application.

Communication with the Tax Administration relies on a GPRS connection, ensuring complete automation. This connection allows for individual transaction references, enabling the seamless reporting of each transaction to the Tax Administration.

Ireland

No real-time reporting requirement. Despite that, taxpayers must maintain records for 6 years under the Taxes Consolidation Act, VAT Consolidation Act and Value Added Tax Regulations.

Italy

Italy is the first country to implement a hardware fiscalization mechanism in the early ’80s. They have also Entities must use a Registratore Telematico (RT) device or server in order to satisfy their obligations. The certified RT devices automatically submit fiscal data to the Agenzia Entrate.

Italy has had real-time pre-authorization of invoices and reporting since 1 January 2019 through the e-invoicing platform Sistema di Interscambio (SdI) for B2B transactions and since 2014 for B2G transactions. This also includes real-time invoice reporting for cross-border transactions from June 2022.

Lithuania

Lithuania is another country which utilizes hardware fiscalization through the use of a fiscal device since 1996 with major changes in 2012. The fiscal device must contain a POS system with cryptographic device certification.

Many changes are expected concerning e-reporting and e-invoicing in Lithuania in 2023. One is that currently there is no communication with the Lietuvos Respublikos Finansų Ministerija or Lithuanian Tax Authority, but will be likely mandated in the future.

There is also on-demand SAF-T reporting for entities with an above €30,000 sales threshold.

Malta

Malta enforces a hardware-based fiscalization system through which cash registers must be certified. Fiscal reports must be issued at the end of every workday.

Reports can be issued in 4 different ways:

1. VAT department issued receipt book

2. Approved fiscal cash registered

3. Fiscal printer

4. Audited POS system

Montenegro

Starting on 1 January 2021, the Ministarstvo Finansija replaced its hardware-based fiscalization system with an online software one. Following the end of the transition period on 1 June 2021, all registered taxpayers had to use this real-time electronic reporting system.

This is done through the use of electronic cash registers (ENUs) which have a software system that can record and transmit fiscal data to the centrally made web service similar to Croatia and Slovenia.

Norway

No real-time hardware or technical requirement, but a mandatory software solution implementation through POS systems since 2017. The POS system must be submitted to the Skatteetaten or the Norwegian Tax Authority for approval.

There is also a requirement to submit SAF-T reports from 1 January 2020 on an on-demand basis.

Poland

Fiscalization in Poland has transformed quite significantly since its implementation in 1993. Despite still utilizing hardware for fiscalization, transactions are sent to the Ministerstwo Finansów or Polish tax authority through the Internet with the use of fiscal devices such as online cash registers or online printers.

As Polish e-invoicing is scheduled to be implemented in 2024, there is also a high likelihood that e-reporting guidelines are likely to be updated in the near future.

Starting on 1 January 2025, SAF-T reporting will become a periodic obligation.

Portugal

Portugal utilizes a software fiscalization system which primarily revolves around the use of POS applications certified by the Direcção Geral dos Impostos (DGCI) or the Portuguese Tax Authority. The system must also undergo formal check-ups to maintain the reliability of the software. This requires a local contact in order to certify and re-certify a POS system.

From 1 January 2023, it is also obligatory for organizations to submit monthly SAF-T files by the 5th of every month to the Autoridade Tributária e Aduaneira or Portuguese Tax Authority.

Romania

Since 1999, Romania has implemented a hardware-based fiscalization through fiscal devices that have undergone many improvements. Using a fiscal printer and an SD card to store data and an updated receipt layout is necessary.

Through the SAF-T D406 Standard Tax Control File they must report monthly tax and accounting information, an annual asset report and any information about stock upon Agenția Națională de Administrare Fiscală (ANAF) request.

Monthly SAF-T e-reporting implementation deadlines:

• 1 January 2022 - monthly filing for large taxpayers
• 1 January 2023 - medium taxpayers
• 2025 - small and non-resident taxpayers

Russia

From 2017 onwards, fiscal cash registers must be used. Unlike many other countries, there is no mandated POS system. Registered fiscal data operators (OFD) then communicate fiscal data through a private key to the Russian Tax Authority.

Serbia

The hardware fiscalization system was introduced in 2007 through the Zakon o Fiskalnim Kasama or Law of Fiscal Cash Registers. Taxpayers must maintain records through the use of fiscal devices and print them at the end of every work day as well as a periodic report at the end of their tax period.

In 2022 Serbia transitioned to combining the current fiscalization system with software which is enforced through the Zakon o Fiskalizaciji or Law on Fiscalization.

Serbian e-invoices are also real-time reported through the eFaktura platform since 1 May 2022 for B2G transactions and since 1 January 2023 for B2B transactions.

Slovakia

Slovakia’s fiscalization system is characterized by a mix of hardware and software-based systems where all taxpayers must be registered on the eKasa platform since 1 July 2019. This method requires internet connectivity since data is transmitted to the Financií Slovenskej Republiky or Slovakian Ministry of Finance in real-time.

Slovenia

Real-time reporting is required through online fiscalization on the eDavki portal. Through it, the Finančna Uprava or Slovenian Tax Administration is able to receive real-time data on receipt issuance and payment delivery. Its fiscalization process features a POS software solution that authorizes every fiscally relevant transaction. The Tax Authority also collects the authorization code from every receipt which must also contain a QR code.

Spain

There is currently no real-time reporting requirement in the mainland of Spain and there is no hardware or software certification requirement. The Basque region has recently started to utilize the TicketBAI system in 2024 through which taxpayers must report invoice data in real-time. The rest of mainland Spain will begin to implement real-time reporting through the use of the VeriFactu system in 2024.

Currently, only large companies with an annual turnover of over €6,010,121.04, businesses under the REDEME VAT refund scheme and members of VAT groups must submit invoices to the Suministro Inmediato de Información (SII) within 4 days of their issuance.

With the introduction of mandatory B2B e-invoicing in 2024, Spain is likely to roll out real-time invoice reporting through the CTC approach for all businesses. This will include the use of specialized software that will embed transactions with a QR code and then forward the information to the Agencia Tributaria (AEAT) or Spanish Tax Authority.

Sweden

Sweden is another country that utilizes hardware-based fiscalization which is based on the fiscal device-control unit or control system. This Skatteverket government-certified device's main purpose is to sign and store transactions. It receives data from the cash register which will then produce a control code which is placed on the fiscal receipt and then sent to the government.

Türkiye

Turkey first implemented fiscalization and the use of fiscal devices in 1985 along with the Fiscal Law in 2016 and further increased its scope by implementing software fiscalization in 2020. Since 2020, entities must switch to online cash registers or e-Documents to be fiscally compliant.

Through the e-Arşiv invoice portal, taxpayers have had to real-time report both B2C and B2B invoices since 1 March 2022.

Obligatory use of the e-Arşiv portal:

• If the total invoice amount to a non-taxable entity is greater than TRY 5,000 (approx. €195)

• If the total invoice amount to a taxable entity is greater than TRY 2,000 (approx. €78)

United Kingdom

No real-time reporting requirement. The Making Tax Digital (MTD) initiative created an online, digital system for VAT tax reporting for those with a taxable turnover of over £85,000. Starting in April 2023, MTD reporting will be required by all businesses, non-VAT registered sole traders and landlords earning above £10,000 gross.

Conclusion

As a part of the VAT in the Digital Age package, many changes will arrive to EU digital reporting requirements on or before 2028. In January 2028, member states will not be allowed to use the pre-clearance e-invoice authorization and countries such as Italy which already use it, will need to transition before the deadline. During this time, member states will either impose e-invoicing or real-time reporting and must follow the EN 16931 standard in order to assist with the long-term harmonization of reporting systems.

How DDD Invoices can help

DDD Invoices simplifies e-invoicing by providing an e-invoicing solution that integrates into your existing software. This allows companies to automate the invoicing process and eliminate the need for manual data entry.

We stay up to date with local tax regulations so you don’t have to. Comply with obligatory B2B e-invoicing and e-reporting with ease through a single API. If we do not currently serve a territory where you require e-reporting, let us know, and we can develop it in 2-3 weeks. This way, we can ensure your VAT compliance at all times, wherever you do business.