Mandatory VAT Reporting in Digital Commerce – New Transparency Requirements in Focus

E-commerce continues to grow rapidly—along with the need for reliable, standardized VAT-relevant data. Both at the EU level and nationally, efforts have been underway for several years to modernize reporting obligations. The goal is to reduce tax fraud, improve audit capabilities, and harmonize cross-border processes. Businesses involved in online commerce should therefore prepare early for a significantly stricter data and reporting infrastructure.

1. Why are reporting obligations being tightened?

Digital business models, platform-based commerce, and global goods flows have pushed the traditional VAT system to its limits. While transactions occur in real time, VAT-relevant information often becomes available only weeks or months later—creating a window that facilitates fraud and incorrect reporting.

Tax administrations are therefore increasingly relying on:

1. digital real-time or near-real-time reporting,
2. standardized data structures,
3. automated plausibility checks,
4. greater responsibility for marketplaces and platforms.

For businesses, this means that their VAT processes must become more precise, more transparent, and more technically robust.

2. New focus areas: data quality, platform responsibility & transparency

Online commerce is particularly affected. Marketplaces are increasingly required to provide data about their sellers and, in some cases, even assume VAT obligations themselves. Companies should prepare for the following developments:

1. Higher data requirements: invoice details, transaction data, and B2C/B2B classifications must be accurate and machine-readable.
2. Obligations for marketplaces: operators must verify who is selling, where consumption takes place, and what the applicable VAT burden is.
3. Greater control of goods flows: cross-border supplies and digital services will be a key focus of automated audits.
4. Harmonization of data formats: uniform EU standards will facilitate reporting in the long term—but require short-term adjustments to ERP and shop systems.

3. What does this mean in practice for businesses?

For many retailers—especially small and medium-sized enterprises—the shift requires a professionalization of their tax-related IT systems. This includes:

1. reviewing the quality of master data (VAT ID, delivery addresses, customer segmentation),
2. automating invoicing and data archiving,
3. establishing a centralized data environment that systematically records VAT-relevant information,
4. consulting system providers to ensure ERP, shop, and marketplace interfaces can meet future reporting obligations.

Companies that already rely on structured, digital processes will handle the upcoming changes far more easily.

4. Conclusion

The trend is unmistakable: VAT is becoming more digital, faster, and more data-driven. It is crucial for businesses to implement robust processes and clean data sets as early as possible. Those who still work with manual records, Excel spreadsheets, or inconsistent systems should act now—before new reporting formats and digital audit mechanisms become mandatory.