Eastern Europe:
Which countries use CTC?
Recently, some countries in Eastern Europe have started to introduce continuous transaction controls (CTC). The system is designed to combat tax fraud and reduce the VAT gap.
Latvia
Latvia is among the countries that have recently announced that they will introduce a new CTC system. The Latvian government approved to introduce an electronic invoicing system. Electronic invoicing is to be introduced as mandatory for B2B and B2G transactions from 2025. The framework of the system is to be the PEPPOL network. More details will be announced in the course of 2022.
Serbia
The introduction of the CTC framework in Serbia is developing very quickly, so much so that it is even moving a little too fast for some stakeholders. The Serbian Ministry of Finance has therefore postponed the effective date of the CTC system for B2G transactions to the end of April 2022. This gives the relevant stakeholders enough time to adapt to the new e-invoicing system.
Here’s what the schedule looks like:
as of May 1, 2022
as of July 1, 2022
Obligation to receive and store electronic invoices for all taxpayers
as of July 1, 2022
as of January 1, 2023
Obligation of all taxable persons to issue electronic B2B invoices via the CTC system
Slovenia
As early as June 2021, the Ministry of Finance submitted a draft law to the Slovenian Parliament containing the mandatory introduction of electronic invoicing in Slovenia. However, only the B2B sector would initially be obliged to exchange invoices in electronic format. For B2C transactions, consumers could choose to receive their invoices in electronic format or traditionally as a printed document.
However, the draft law was withdrawn by the Ministry of Finance due to disagreements among stakeholders. The Ministry of Finance now wants to revise the draft in order to simplify the process and keep the administrative burden on businesses to a minimum. There are still discussions about the introduction of the CTC system. However, due to the upcoming Slovenian parliamentary elections in April 2022, developments on the CTC reform are not expected to progress further until summer 2022 at the earliest.
Slovakia
In Slovakia, a draft law regulating the introduction of the CTC system was recently published. The CTC system should serve to reduce the VAT gap as well as to manage the receipt of real-time information. The timetable for the introduction of the Electronic Invoice Information System (IS EFA, Informačný systém elektronickej fakturácie) in Slovakia is as follows:
as of January 2022
e-Invoicing with CTC for the B2G, G2G and G2B sectors
as of January 2023
e-Invoicing with CTC for the B2B, B2C and G2G sectors
as of January 2023
Poland
On November 18, 2021, the regulations regarding the CTC system were published and it was thus announced that from January 2022 it will be possible to introduce and use the Krajowy System e-Faktur (KSeF) as a voluntary system. The goal is to extend the voluntary use to the obligation for the B2B sector from January 2023.
Romania
Romania has the largest VAT gap in the EU and in order to address it, a CTC scheme has now also been adopted. For this purpose, the legal framework was established in October 2021, which regulates the introduction of the e-Factura system, the Romanian structure for e-Invoicing and the basic technical specifications for the CTC system. The Romanian e-Factura system was already implemented on November 6, 2021 as a voluntary system. This regulation applies to suppliers processing both B2B and B2G transactions. For the further mandate, no further information as well as dates have been announced yet.
Outlook
As soon as there is new information about the introduction of the CTC system or new countries are added that want to introduce the transaction controls, INPOSIA will inform you and keep you up-to-date.
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