We talk ViDA with Fredrik at the Swedish Tax Agency - part 1

In five years' time, all cross-border transactions within the EU will be carried out using electronic invoices and the associated tax reporting will be automatic.
Sweden must have a functioning system in place by then. Otherwise, we will be in breach of the EU directive that we helped to approve.
How is the work going? We've reached out to Fredrik Andersson Carlö, theme leader for transaction-based reporting at the Swedish Tax Agency, for an update on Sweden's ViDA perspective and how the agency he represents views this regulation, its implementation and intended effects.

EU countries have decided that the VAT Directive should be adapted for today's digital technology and conditions. The reform, which is a larger package of measures, is called ViDA (VAT in the Digital Age) and will be implemented in stages. Fredrik Andersson Carlö is the theme leader for an implementation project at the Swedish Tax Agency that concerns the most comprehensive part of ViDA called Digital Reporting Requirements or DRR. He leads the group that bears the overall responsibility at the agency when the implementation of ViDA DRR is to be carried out.
Ultimately, the government decides, and it is the Ministry of Finance that ensures that their decisions are put into action, but through Fredrik's central position at the Swedish Tax Agency regarding ViDA, he naturally keeps up to date and closely follows what is happening.
Inexchange has done a longer interview with Fredrik that we choose to divide into two articles. There are many questions and even more interesting answers.

Beneficial reform

In part 1, we focus on ViDA itself, on ongoing preparations and the elements required for it to work as intended.

What is the Tax Agency's general view of the ViDA package?
"We are positive about this and so are we as a country. We have voted for ViDA. Our responsible ministers said that it was good when they voted it through, but I will not speak for them. From the Swedish Tax Agency's side, we are positive in any case."
"We also make no secret of the fact that the main reason we like ViDA is that it enables transaction-based reporting in a way that is significantly less costly for companies. Then it is good because it is a step towards digitalization. Invoice processing itself is digitized thanks to these new rules. It streamlines invoice processing and saves businesses time. It also opens the door to other types of digitization. For example, we are considering the possibility of using this approach to manage communication between public authorities and businesses."

According to the implementation plan, EU countries were required to respond by January 25 to the working document on the content of ViDA presented by the European Commission. Do you know if Sweden responded and if so, what were our views?
"No, I do not know. What I do know, but it is perhaps something completely different, is that Sweden expressed a positive attitude to this when it gave its approval, but it did so already in May when the first compromise proposal was presented and vetoed by Estonia. I have not heard anything further beyond that, which does not necessarily mean that nothing has been said. But I am not aware of what would have been said in such cases."

Open to different possibilities

In the framework of ViDA, OpenPeppol, the EU body for standardized invoice formats, networks and rules, is conducting a pilot project in the form of a five-corner model in which VAT reporting is carried out in the additional fifth corner.Is this a sensible model?
"From the Swedish Tax Agency's side, we have not taken a final position on Peppol in the sense that we have officially put our foot down and said that this is what we should have. In the petition that we, the Swedish Companies Registration Office and Digg sent to the government, we expressed our support for Peppol. That is still our position. Peppol seems to be a reasonable solution. On the one hand, it is built on the European invoice standard, which means that you as a user will be compatible with ViDA directly. Secondly, it is an invoice network that is already used in Sweden for public procurement. In addition, it is the only real candidate globally that can become a form of worldwide standard."
"It is also a good solution in terms of the fact that you maintain a market with e-invoice operators who compete among themselves and can offer different types of services in exactly the same way as we have today. We are generally in favor of this solution, but do not exclude other possibilities. Ultimately, it is a matter for the legislator. It is not for us to decide."

A number of EU countries already have governmental national platforms for transaction reporting (Continuous Transaction Controls).Can we expect these countries to give up their CTC systems easily?
"That is a good question. ViDA contains a wording that says that by 2035 all countries should harmonize with the said reform. Before that, there will be an evaluation in 2033. Assuming the evaluation is positive, all countries will harmonize their old systems with ViDA in 2035."
"The question is: what does that mean in practice? I don't think it necessarily means that you have to move to Peppol. ViDA does not say that you have to have Peppol. It just says that the format must comply with European standards. It does not say that we have to have a single system for all EU countries. That's probably not going to happen either. Then, of course, you never know what will happen in the future. If Peppol were to achieve some kind of global standard, countries might join it anyway, because they don't want systems that make things difficult for smaller companies. That is conceivable, but it is unlikely to happen in the foreseeable future."

Part of a cooperation program

The EU's cooperation program for national tax administrations, Fiscalis, is holding a workshop in Vienna on 8-10 April. Is Sweden represented?
"Fiscalis has many variants, but you are probably referring to the group working on benchmarking transaction-based reporting and mandatory e-invoicing. We are part of that, yes. We have two participants from Sweden who are part of the project group I lead at the Swedish Tax Agency."
"What will be discussed? A report will be released, but it will not be made public. But what has been done so far, for example, is to take a closer look at five countries that have introduced some form of transaction-based reporting system.Forms have been sent out to all countries describing their plans, what they have done so far and how they see the matter."
"Our hope at the Swedish Tax Agency is that this will give us more meat on the bones for our choices in the future. As a type of system. As I said earlier, it will probably be Peppol we look at, but there are also other issues. It is an advantage if we have a broad basis to start from when we eventually have a dialog with the legislator. Then we certainly have issues linked to technical solutions where we would like to decide ourselves from the Swedish Tax Agency's side how to do it."

Petition from the Swedish Tax Agency, the Swedish Companies Registration Office and Digg to the Government on mandatory e-invoices - read it here

Part 2: Will we have a law in Sweden on mandatory e-invoices for companies and authorities? What does Germany's move to legislate on e-invoices mean? Is it serious that Sweden's VAT gap is growing? Plus a few more questions. Stay tuned!